“Roaring Kitty” has skin in the game. The protagonist of the meme frenzy is bullish on GameStop, revealing in the latest update of his portfolio that he holds more than 5 million shares in the company.
- “Roaring Kitty” Gill has revealed his updated portfolio on Reddit, showing he holds over 5 million GameStop shares, 120,000 call options, and $29 million in cash, totaling $210 million in assets, sparking a significant pre-market rally in GME shares.
- GameStop’s bullish movement also led to significant pre-market jumps in other meme stocks such as AMC Entertainment, Koss Corp, Tupperware, BlackBerry, Clover Health, and Beyond Meat, mirroring a similar surge from mid-May.
- GameStop’s management, led by Ryan Cohen, has previously leveraged market overvaluation to raise capital, and with the company’s ongoing transformation towards a holding company model, this presents another opportunity to strengthen its balance sheet and pursue new growth plans.
Source: YouTube
The Kitten Strikes Back Again
“Roaring Kitty” Gill is once again betting big on GameStop.
The protagonist of the meme stock saga revealed on the social media site Reddit, through the username “DeepF**kingValue,” his updated portfolio, showing he holds 5 million GameStop (NYSE: GME) shares, 120,000 June 21st $20 GME calls, and another $29 million in cash, totaling $210 million in assets.
The last time the “Roaring Kitty” portfolio was updated was 3 years ago when he held 200,000 GameStop shares, purchased at $55 per share pre-split, which today would be approximately $13.75 per share.
Amid much speculation about whether Gill was still bullish on GameStop, the recent update led GME shares to jump more than 80% in pre-market trading on June 3rd.
What Could Be the Next Steps for GME
On the last “Meme Stock Monday,” the abrupt uptick in GameStop’s share price at the start of the trading session on May 13th caused all out-of-the-money option calls to automatically become in-the-money, leading to a shortage of options and a pause in the unexpected bullish rally.
Volatility also caused technical issues, as GameStop stock was halted more than 30 times in just two trading sessions. Although there is much dispute among bullish GameStop traders on this topic, volatility halts are legal and are a mechanism designed to prevent extreme volatility and provide investors with time to assess information and make informed decisions.
I hope that similar measures will be in place during this new episode involving meme stocks, with Roaring Kitty as the central figure.
Regarding GameStop as a business, last time, the company’s management, led by Ryan Cohen, quickly took advantage of the unexpected overvaluation to sell shares and raise cash. The video game retailer managed to sell 45 million shares for $933 million, incorporating that amount into its balance sheet, resulting in around $1 billion in cash and equivalents.
Considering that GameStop’s fundamentals are far from optimistic due to the recent drop in its revenues and its inability to generate growth through its core business, Ryan Cohen and his team are conducting a turnaround that strongly indicates a shift towards becoming a holding company, potentially investing in businesses unrelated to video games or brick-and-mortar retail.
I believe this is yet another golden opportunity for Ryan Cohen, at the helm of GameStop, to potentially raise more capital and transform the company’s balance sheet into a fortress, allowing it to calmly pursue new growth plans.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content)
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