US Markets
Thursday, June 13th, 2024 6:57 pm EDT
Key Points
- GameStop’s annual shareholder meeting was disrupted due to server crashes from overwhelming interest, leading to an immediate adjournment and plans to reschedule the event.
- The technical issues coincided with a resurgence in meme stock activity, particularly influenced by Keith Gill (Roaring Kitty), whose renewed social media presence spurred significant retail trading interest in GameStop.
- Amidst this volatility, GameStop announced it raised over $2 billion through an at-the-market equity sale, intending to use the funds for general corporate purposes, including potential acquisitions and investments.
GameStop’s annual shareholder meeting faced significant disruption due to server crashes caused by overwhelming interest in the event, as reported by a customer service representative from Computer Share, the company hosting the stream. The meeting, scheduled to start at 11 a.m. ET, experienced widespread accessibility issues, with many attendees receiving error messages indicating the page could not load. Social media posts and CNBC’s attempts to access the stream confirmed these difficulties. An unofficial YouTube stream indicated that the meeting eventually commenced at 11:48 a.m. ET but was promptly adjourned due to the technical problems preventing stockholders from participating. GameStop announced it would provide an update on rescheduling the event as soon as possible.
The Computer Share representative informed CNBC that their servers were overwhelmed by the high volume of traffic, which they were not prepared to handle. The technical team was working to resolve the issue, and attendees were advised to attempt logging in periodically.
This incident coincided with a resurgence of interest in meme stocks, spurred by Keith Gill, also known as Roaring Kitty, who resumed posting on social media after a hiatus of over three years. Gill is known for his significant investments in GameStop, which previously triggered a frenzy among retail traders. On the day of the disrupted meeting, GameStop’s stock experienced volatile trading, closing up 6% after an earlier peak gain of 10.7%.
In the lead-up to this, GameStop announced it had raised over $2 billion through an at-the-market equity sale, intending to use the funds for general corporate purposes, including potential acquisitions and investments. Traders closely monitored Roaring Kitty’s actions, as his activity could significantly influence the stock price. On Wednesday afternoon, GameStop shares experienced a sudden sell-off as trading volume spiked in the call options owned by Roaring Kitty. These call options, expiring on June 21 with a $20 strike price, saw an extraordinary volume of 93,266 contracts traded, far exceeding the 30-day average of 10,233 contracts. The price of these options dropped over 40% during the session, while GameStop’s stock fell 16.5%.
Roaring Kitty reportedly owned 120,000 of these call contracts, as shown in a screenshot he shared. While it is unclear if he was behind the large trading volume, options traders suggested his significant holdings could imply his involvement. The open interest on these calls had decreased to 111,818 contracts by Thursday morning, below Roaring Kitty’s initial 120,000. By midday Thursday, more than 42,000 such contracts had been traded.
Overall, the disruption of GameStop’s shareholder meeting highlights the intense interest in the company amidst the ongoing meme stock phenomenon and the significant influence of prominent traders like Roaring Kitty on market dynamics.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/13/gamestop-annual-shareholder-meeting-2024-servers-crash.html
