GameStop stock soared Monday after Keith Gill, a key investor during the 2021 meme stock rally, revealed a major position in the video game retailer. AMC Entertainment and other meme stocks jumped to follow GameStop higher. But Roaring Kitty's resurgence is drawing scrutiny from brokers and regulators.
Gill, who goes by the username Roaring Kitty on social media platforms X and YouTube, on Sunday night posted on Reddit for the first time since early 2021. Gill appeared to post a screenshot of an E-Trade account showing a $181.4 million position in GameStop stock and options. However, it is unclear if it is Gill himself posting to the account. The latest Reddit post was made to r/Superstonk rather than r/wallstreetbets, where he posted his GME stock updates during the 2021 meme rally.
The June 2 screenshot indicates that Gill holds 5 million shares of GameStop stock worth $115.7 million, with an average purchase price of $21.274 per share. It also shows 120,000 call options that expire on June 21 with the right to purchase GME stock at $20 per share. The GameStop options are worth $65.7 million according to the screenshot.
Gill posted a June 3 update after Monday's close showing he maintained his GME positions throughout the day. His GameStop stock holdings were worth $140 million at the end of day Monday. The call options ballooned to $120 million.
But Morgan Stanley-owned E-Trade is considering kicking Gill off its platform due to concerns of potential stock manipulation, the Wall Street Journal reported late Monday citing unnamed sources. Morgan Stanley's global financial crimes unit and external counsel reportedly began discussions about if Gill's recent actions were legal and if the firm should cancel his E-Trade account, according to reports. But some Morgan Stanley employees are concerned that backlash could result in losing E-Trade clients.
Meanwhile, the Securities and Exchange Commission has been reviewing trading activity for GameStop call options around the timing of Gill's social media posts to determine if they could be considered manipulation, the WSJ reported.
Gill made a similar reappearance on X on May 12, when he posted a series of memes implying that he's back and trading again. However, most traders who bought into the mid-May rally were underwater by May 17.
GameStop Stock Leads Meme Rally
GameStop stock pared gains to 21% Monday. GME stock vaulted more than 74% premarket to trade above 40 per share. GameStop stock rallied 59.7% this year amid the meme stock resurgence.
AMC stock jumped 11.1% Monday after popping about 23% premarket. Still, AMC stock has tumbled more than 21% in 2024 despite the Roaring Kitty rally.
BlackBerry was flat Monday after surging 4.7% premarket. But BB stock is still down about 21% this year.
Robinhood trimmed its advance Monday to 1.8% after swinging 5.7% higher in early trade. Shares of the mobile broker have spiked 67% in 2024.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
