GameStop, the struggling video game retailer, made a surprising announcement on Friday as it reported a decline in quarterly sales and revealed plans to sell up to 75 million shares. This move came ahead of a highly anticipated livestream by meme stock influencer Keith Gill, also known as “Roaring Kitty.”
Gill, who gained fame for his role in the GameStop stock rally earlier this year, announced a livestream on YouTube scheduled for 12 pm ET. This news caused GameStop shares to surge by over 47% in the previous session. However, the stock took a hit on Friday after the company disclosed its intention to raise over $3 billion through a share sale.
The results for the first quarter showed a decrease in net sales compared to the previous year, highlighting GameStop’s struggle to compete with e-commerce firms in the video game and collectibles market. Thomas Hayes, chairman at Great Hill Capital LLC, commented on the situation, stating, “Every time Roaring Kitty pumps up the stock, they get a spike that they can use to raise more equity and dilute shareholders.”
Despite the recent surge in GameStop shares following Gill’s return to the spotlight, some analysts believe that the fervor seen in 2021 may be lacking this time around. Short interest in the stock remains high, indicating ongoing bearish sentiment among investors.
Overall, the current market conditions do not mirror the speculative energy seen in 2021, according to Jason Draho, head of Asset Allocation Americas at UBS Global Wealth Management. While meme stock activity continues to make headlines with dramatic one-day moves, the broader market landscape appears to be more subdued.