GameStop (GME) stock rose 75% on Monday after user “DeepF***ingValue” on Reddit, an account believed to be linked to individual investor Keith Gill – who sparked the meme stock rally in 2021 – posted a screenshot. on Reddit on Sunday evening, which purported to show they had built a nearly $175 million position in the video game retailer.
Gill is also known as Roaring Kitty on X and YouTube. The user posted the screenshot on Sunday evening to Reddit’s Superstonk subreddit.
The screenshot shows holdings of 5 million GameStop shares purchased at an average price of $21.274, a position worth $115.7 million at Friday’s closing price of $23.14. GameStop shares were trading around $40 on Monday.
The account also appears to hold 120,000 options contracts that expire on June 21. These contracts grant the right to buy GameStop shares at $20 each, a position worth $65.7 million as of Friday’s close.
Monday’s premarket surge comes after GameStop rose 180% over a two-day period in mid-May following “Roaring Kitty.” posted for the first time on X, formerly Twitter, since 2021.
Last month’s rally was short-lived, as analysts warned that the meme stock this time around was a far cry from the level of retail inflows seen in 2021.
Still, GameStop benefited from the May rally. Last month, the company sold 45 million shares, generating proceeds of about $930 million. The stock jumped 25% on the news.
Typically, investors expect the stock price of a company issuing new stock — which dilutes the value of current holdings — to decline after a stock sale.
“If this was a normal market, people would be a little panicked,” Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance last week after the news.
“You don’t sell stocks in the market if you think your stocks are undervalued. You do it when you think your stocks are overvalued.”
AMC (AMC) also benefited from the meme frenzy, raising $250 million through the sale of 72.5 million shares last month. AMC shares also rose on Monday, gaining 30% in early trading.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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