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Roaring Kitty’s incoming livestream wasn’t enough to keep GameStop stock out of the red after the company reported its first-quarter earnings on Friday morning.
The video game retailer’s shares had surged 30% in pre-market trading before plunging more than 21% at market open just a few hours later, with its quarterly earnings report putting a damper on the meme stock excitement.
GameStop’s net sales plunged 28% to $881.8 million in the 13 weeks ended May 4, from $1.24 billion in the same period last year, the company reported before the bell on Friday. It had a net loss of 32.3 million for the quarter, narrower than its $50.5 million in losses a year ago. GameStop had projected falling sales in a regulatory filing last month.
The company had said it would be reporting its results on June 11.
In a separate filing Friday, the company revealed that it is planning to sell up to 75 million additional shares of its common stock. It warned that the common price of its stock “has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control,” including short squeezes. Last month, the company said it was planning a sale of 45 million additional shares of its class A common stock.
Before reporting these disclosures, however, GameStop’s stock was way up. It skyrocketed more than 40% on Thursday afternoon after investor Keith Gill, known by his social media persona “Roaring Kitty,” scheduled a livestream on YouTube at noon Friday to discuss his GameStop stake. Shares of the company ended the day up 47%, valued at $46.55 apiece.
Read more: The meme stock rally caught hedge funds by surprise last time. Not this time
Gill, who goes by DeepF———Value on Reddit, gained national attention during the COVID-19 pandemic for his bullish analysis of GameStop on Reddit, and drove the first short-squeeze of the video game retailer’s stock in early 2021, which saw its shares surge more than 1,000% in a matter of weeks.
And last month, he kicked off a renewed meme stock frenzy around GameStop stock, sending the company’s shares on a wild ride. The retailer’s shares are up nearly 180% year-to-date, regardless of its actual performance or prospects — making it a textbook meme stock.
Gill revealed in a Reddit post Sunday that he owns 5 million GameStop shares, which would have been worth almost $116 million as of Friday’s closing price of $23.14 per share. According to an updated screenshot of his portfolio posted Thursday, Gill continued to hold the same stake in the company.