GameStop stock tanks 24% as weak earnings trump Roaring Kitty's planned livestream
- GameStop shares tanked 24% in morning trading on Friday after weak first-quarter earnings.
- They rose nearly 40% earlier in the day ahead of Keith "Roaring Kitty" Gill's first livestream in three years.
GameStop shares tumbled 24% to $35 on Friday morning after the company disclosed worse first-quarter earnings than Wall Street had expected. The meme stock was up nearly 40% in premarket trading as fans eagerly awaited Keith "Roaring Kitty'" Gill's first livestream in three years.
The video-game retailer's revenue slumped 29% year over year to below $900 million for the quarter ending May 4. More positively, its net loss narrowed to $32.3 million from $50.5 million a year earlier. Analysts were expecting a smaller top-line decline.
GameStop stock had more than quadrupled from about $10 in late April to about $47 at Thursday's close — and would have been up six-fold if the initial premarket gain held.
Apart from the intraday high of $65 it touched on May 14, GameStop hasn't traded above $60 on a split-adjusted basis since November 2021. But the stock remains well below its peak during the original meme-stock frenzy.
Gill rose to fame as an unwavering champion of the beaten-down stock. He helped spark the sensational short squeeze that drove GameStop's price from below $5 at the start of 2021 to an intraday high of about $121 on January 28 that year — a more than 24-fold increase.
The star investor has reignited enthusiasm for the stock in recent weeks by returning to social media. He's posted scores of memes on X, shared purported screenshots of his stock portfolio showing a huge GameStop position, and scheduled a livestream on his YouTube channel for 11 a.m. ET on Friday.
The initial frenzy around GameStop in 2021 drew in plenty of prominent investors and businesspeople. Tesla CEO Elon Musk tweeted "Gamestonk!!" and linked to Reddit's WallStreetBets forum. The billionaire investor Chamath Palihapitiya publicly purchased bullish call options on the meme stock.
At the same time, the "Bond King," Bill Gross, bet against the stock as he felt assured the mania wouldn't last. The "Big Short" investor Michael Burry also appeared to sell his GameStop shares the quarter before the stock exploded and took to Twitter to warn buyers to be careful during the frenzy.
Some retail traders clearly see Gill's return to promoting GameStop and publicly betting on the stock as a bullish signal and have piled in alongside him, hoping to capture gains to rival those of the 2021 boom. However, other investors appear to be souring on the stock once again.