Shares of GameStop (GME) fell as much as 17% in early trading Friday after the video game retailer reported quarterly results that missed analyst estimates and announced a stock sale just hours before a highly anticipated livestream of “Roaring Kitty,” an alias that goes by used in the past of bullish retail investor Keith Gill.
For the first quarter, GameStop reported an adjusted loss of $0.12 per share, compared with estimates of a loss of $0.09. Net sales fell 29% to $882 million, compared to analyst estimates of $995.5 million. Wall Street expected quarterly results later this month.
The company also filed to sell up to 75 million additional shares. Last month, GameStop sold 45 million shares, generating about $930 million in proceeds.
The announcements followed the stock’s 47% rise during the previous session, after “Roaring Kitty” scheduled a livestream on YouTube at noon Eastern time on Friday.
This would be Gill’s first live appearance on the channel since the investor helped ignite the 2021 meme stock rally through his bullish videos and posts about the video game retailer.
After the market closed on Thursday, ‘DeepF***ingValue’, a Reddit handle previously also linked to Gill, posted a screenshot that reportedly showed the user’s portfolio rising to $586 million, which included GameStop stock holdings and not -exercised option positions.
Earlier this week, the same user revealed a $175 million bet on GameStop. Shares also rose after that report.
GameStop shares have been on a roller coaster ride over the past month as Gill resurfaced on social media, leading to some calls for Gill to be investigated.
“The fact that this person bought short-dated call options on GameStop and then tweeted for the first time in forever — knowing that these Reddit WallStreetBets people would then drive up the stock price… it’s shady,” Loop Capital Markets said. director Anthony Chukumba told Yahoo Finance on Thursday afternoon.
Earlier this week, the office of the top securities regulator in Massachusetts confirmed to Reuters that it has opened an investigation into “Roaring Kitty’s” GameStop trades.
Late Monday, following the user’s emergence over the weekend, the Wall Street Journal reported that executives at Morgan Stanley’s (MS) E-Trade platform were considering starting an account linked to the screenshot. GameStop shares fell about 5% the next day.
GameStop soared 180% over a two-day span in mid-May after “Roaring Kitty” posted for the first time on X, formerly known as Twitter, since 2021.
Last month’s rally was short-lived and analysts have warned that the meme action this time around is a far cry from the level of retail inflows three years ago.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre.
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