Has the meme stock frenzy come to an end? "Roaring Kitty" may have liquidated his GameStop call options
"Roaring Kitty" Keith Gill appears to have liquidated his long call options on GameStop and increased his holdings of GameStop stock. Gill's investment portfolio no longer includes 120,000 options, but instead over 9 million shares of common stock. As the options expiration date approaches, Wall Street has been speculating whether Gill will exercise the contracts to acquire the stock. GameStop was scheduled to hold a shareholder meeting on Thursday, but it was postponed due to technical issues. Last week, Gill's disclosure of his options position and news of his return to YouTube caused GameStop's stock price to rise. GameStop raised $2.14 billion in cash through the increase
According to the Smart Finance app, Keith Gill, known as "Roaring Kitty" among retail investors, seems to have liquidated his GameStop (GME.US) call options, which were set to expire next week with a strike price of $20, while increasing his holdings of GameStop shares.
A screenshot from Gill's Reddit account on Thursday showed that his portfolio no longer included 120,000 GameStop call options, which were set to expire next week with a strike price of $20. Instead, his portfolio included over 9 million shares of GameStop common stock, up from 5 million shares earlier this week.
The screenshot indicated that Gill's cash position dropped from nearly $30 million on Monday to $6.3 million. This suggests that Gill may have used some of the cash to increase his holdings of common stock.
On Wednesday and Thursday, the trading volume of these call options was around 142,000 contracts. As of the close on Wednesday, the number of open contracts had decreased by 34% to 111,818 contracts.
Active trading in GameStop options
On Wednesday, call options with a strike price of $20 closed at $6.40. On Thursday, with GameStop's stock price rising 14% to $29.12, the trading price of these options ranged from $6 to $9.80. This means that the price of these options was higher than Gill's claimed average purchase price of $5.6754.
Danny Kirsch, options director at Piper Sandler, said, "It looks like he sold 80,000 call options and exercised 40,000. According to the screenshot circulating on Reddit, he now holds 9 million shares of stock."
Amid the surge in trading volume, GameStop was scheduled to hold a shareholder meeting on Thursday. However, the company stated that the meeting was postponed due to technical difficulties with the live stream.
Last week, Gill's disclosure of his options position and his return to YouTube nearly doubled GameStop's stock price to over $45. Taking advantage of this surge, GameStop sold $2.14 billion worth of stock to raise cash. As the options expiration date approaches, Wall Street has been speculating whether Gill will exercise the contracts to acquire stock or simply close them out.
Over the past four weeks, Gill's posts on X platform, along with his investment portfolio screenshots on Reddit, have prompted investors to buy GameStop shares.
At the time of writing, GameStop was down 1.20% in pre-market trading, at $28.77. Other meme stocks were also trading lower, with AMC Theatres (AMC.US) down nearly 2% pre-market and headphone retailer Koss Corporation (KOSS.US) down almost 1%