This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
It is becoming increasingly evident, at least in the more discerning financial circles, that Roaring Kitty - the progenitor of sorts for the retail-driven meme stock mania - is on a mission, one that entails recruiting his devoted army of retail investors to periodically pump the price of GameStop shares, allowing the company to then leverage its artificially inflated stock price to raise more cash.
Roaring Kitty's GameStop Pump
In early June, Keith Gill - who is popularly known by his Reddit alias Roaring Kitty - revealed that he owned 5 million physical GameStop shares, and retained control over an additional 12 million shares through his 120,000 call options on the stock bearing a strike price of $20 and expiring on the 21st of June, igniting bouts of heightened momentum in GameStop shares in the process.
After failing to spark a sustained bullish momentum in GameStop shares, however, Roaring Kitty announced on the 13th of June that he had sold all of his call options and that he had converted the proceeds into additional shares. As of the last available update, Roaring Kitty owned 9.001 million GameStop shares, up from his original 5 million shares.
Just 3 months later and GameStop's out with another ATM stock offering
"When the ducks are quacking, feed them. When the ducks are still quacking, feed them some more"
How many shares can the meme market absorb?$GME https://t.co/sULeg9pv6v pic.twitter.com/OmOYY0vKTy
— Julian Klymochko (@JulianKlymochko) September 10, 2024
While Roaring Kitty's antics failed to do much for the ordinary retail traders, his moves in May and June did allow GameStop to raise additional cash via an at-the-market offering of 20 million shares.
Breaking: GameStop is selling 20M more shares
Amended prospectus supplement just hit the wire — stems from the previous prospectus in May and June with those offerings
This supplement is dated for today $GME #GME https://t.co/MAErNH84HJ pic.twitter.com/Y05K4cs5yk
— Wolf of My Street🏡 (@Ryan__Rigg) September 10, 2024
Well, three months later, as Roaring Kitty continued to offer retail traders hope by posting cryptic memes and using his brief love affair with Chewy Inc. as a distraction, GameStop is out today with another at-the-market offering of up to 20 million shares.
At the time of writing, GameStop shares are down ~10 percent in after-hours trading. What's the definition of madness again?
GameStop's Q2 2024 Earnings
$GME talked about the decline in sales year over year this morning ahead of the market open but did post a net income of $14.8M vs a loss of $2.8M in the prior year's quarter #GME
GameStop just reported earnings
Net sales were $0.798 billion for the second quarter, compared… https://t.co/DC7wM1fDNW pic.twitter.com/gX8mHrVfPb
— Wolf of My Street🏡 (@Ryan__Rigg) September 10, 2024
Meanwhile, GameStop announced its earnings for the second quarter of 2024 today, disclosing net sales of $798 million vs. consensus expectations of $895.67 million.
On the positive side, the company did manage to report a positive net income of $14.8 million for the quarter vs. a net loss of $2.8 million that GameStop had recorded in the comparable quarter of last year.
Also, thanks to Roaring Kitty's antics, GameStop's cash and cash equivalents stood at $4.204 billion at the end of June. Presumably, the latest at-the-market shelf offering will play an important role in further boosting the company's cash-based liquidity.
