GameStop shares plunge 40% after live-streaming session of ‘Roaring Kitty’

Shares of GameStop, a Texas-based gaming retailer, plunged by 40% in the US stock market on Friday. The decline was recorded after a live-streaming session conducted by stock influencer Keith Gill, known as 'Roaring Kitty' on social media, failed to impress the investors.

On the Nasdaq, GameStop dropped by more than 40% to hit an intraday low of $26.12. At the closing bell, the shares settled at $28.22, down 39.4% as compared to the last closing price of $46.55.

The transactional activity involving the meme stock was high to the extent that Nasdaq had to halt its trading multiple times during the day. Investors, by the end of the session, transacted $10 billion worth of GameStop shares which was higher than all other stocks including Apple and Nvidia, as per the date shared by LSEG.

GameStop’s fall on the bourses was also linked to the company’s decision of not unveiling the planned share sale to raise up to $3 billion, analysts said.

‘Roaring Kitty’ went live

In the live-streaming session with 600,000 viewers, Gill joked about GameStop and other meme stocks. The influencer, who is known to have sparked the unprecedented rally in GameStop’s shares three years ago, said he has an “aggressive style of investing”, which is “almost certainly not suitable for you all.”

While commenting on the manner in which he uses social media, Gill said, "You post a couple of memes, you post a couple of screenshots, and everyone loses their minds,"

A day before Gill’s live-streaming session, GameStop shares had rallied by 50%. The stock began gaining momentum last month, after Gill resurfaced on social media following a three-year hiatus.

Notably, Gill, through his social media posts, had driven a rally in GameStop’s stock in January 2021 that led to its value jumping 21-fold within a few days. Back then, he was considered to have inspired an army of traders to buy the company’s shares amid the short-selling positions taken by hedge funds.

Typically, short sellers take bearish positions in weakening stocks in hopes to log a profit by buying back later when the price further recedes.