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GameStop spooks investors with share sale, results ahead of “Roaring Kitty” livestream

GameStop spooks investors with share sale, results ahead of “Roaring Kitty” livestream

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GameStop spooks investors with share sale, results ahead of "Roaring Kitty" livestream

GameStop posted a decline in quarterly sales and said it would sell up to 75 million shares, in a surprise move on Friday ahead of a much-anticipated livestream by meme stock influencer Keith Gill.

Shares of the struggling video game retailer opens new tab, which reported results four days ahead of schedule, tumbled 20% to $36 before the bell. It was the most-traded stock across U.S. exchanges with more than 40 million shares changing hands as of 8:53 am ET.

Gill, popularly known among traders as “Roaring Kitty”, the key figure behind the eye-popping rally in GameStop shares in 2021, posted on YouTube about a livestream scheduled for 12 pm ET.

That sent GameStop shares up more than 47% in the previous session. But they tumbled on Friday after the company announced plans to raise more than $3 billion through a share sale.

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Results showed first-quarter net sales declined from year ago as GameStop struggles with customers turning to e-commerce firms for buying video games and collectibles.

“Every time Roaring Kitty pumps up the stock, they get a spike that they can use to raise more equity and dilute shareholders,” said Thomas Hayes, chairman at Great Hill Capital LLC in New York.
“So this is an AMC part two – a secularly declining business with sporadic retail interest from time to time.”

Gamestop did not immediately respond to a request for more details on its results, which was released four days in advance without giving a reason.

Just last month, GameStop said it made more than $900 million by selling 45 million shares as it took advantage of the revival meme-stocks rally last month.

In 2021, Gill’s championing of GameStop helped its shares rally by as much as 1,600% before they tumbled. He won a cult-like following among some investors and notoriety with others.

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His apparent return sent GameStop shares soaring in recent weeks. They rose nearly 150% since May 13, when an account on X linked to Gill began posting a series of memes that some investors viewed as a sign of him being bullish on the company.

GameStop rose 21% on June 3 after Gill’s Reddit account posted a screenshot showing a $116 million bet on the stock. The post showed a position of 120,000 GameStop June 21 call options at a strike price of $20, worth $65.7 million at last Friday’s close.

Other names associated with the meme stock phenomenon also fell on Friday, with AMC Entertainment (AMC.N), opens new tab down 8.5% and headphone maker Koss (KOSS.O), opens new tab falling 15.8% after recording double-digit gains in the prior session.

NOT LIKE 2021

While the 2021 rally was fueled in part by retail investors banding together to punish hedge funds that had taken bearish positions in GameStop and other companies, some analysts said the same degree of fervor appears to be missing this time.

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ByteDance confirms layoff plan at its Indonesian unit

ByteDance confirms layoff plan at its Indonesian unit

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ByteDance confirms layoff plan at its Indonesian unit

China’s ByteDance will lay off staff at its Indonesian unit following a deal where it bought a local e-commerce firm and combined it with its TikTok operation, a spokesperson said on Friday.

ByteDance, the owner of TikTok, did not say how many employees would be affected. Bloomberg had earlier reported there would be 450 jobs cut.

In January ByteDance completed a deal to buy a majority stake in Tokopedia, an Indonesian e-commerce firm, from the GoTo group.

ByteDance spokesperson Nuraini Razak told Reuters in a statement the company would “make necessary adjustments” as a result of the combination of TikTok and Tokopedia.

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“We identified areas to strengthen our organisation and better align our teams with company goals,” she said, adding the company would “aim to support employees throughout this transition”.

ByteDance had its own e-commerce operation in Indonesia via its TikTok app, but that was banned under an Indonesian rule that social media applications could not operate as an e-commerce platform.

Tokopedia is one of the leading e-commerce platforms in Southeast Asia’s largest economy.

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Indonesia minister threatens to shut down X over adult content

Indonesia minister threatens to shut down X over adult content

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Indonesia minister threatens to shut down X over adult content

Indonesia is prepared to shut down social media platform X if it does not comply with a regulation barring adult content, the country’s communications minister said on Friday. Indonesia, the world’s biggest Muslim-majority country, has strict rules that ban the sharing online of content deemed obscene.

Minister Budi Arie Setiadi told Reuters he had sent a warning letter to X related to this matter.

“We will certainly shut its services down,” he said, pointing to Indonesia’s electronic information and transaction (ITE) law that can carry a six-year jail sentence if someone spreads pornographic content.

His comments in an interview come after the social media platform recently updated its policies to permit consensually produced adult content.

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X, owned by billionaire Elon Musk, has not responded to Indonesia’s warning letter, Budi said, adding the government would send more letters before deciding on a potential closure.

X, formerly known as Twitter, did not immediately respond to a request by Reuters for comment.

Indonesians are big users of social media and X has 24.85 million users in the country, according to data gathering business Statista.

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Japan watchdog recommends action on MUFG units over sharing of client data

Japan watchdog recommends action on MUFG units over sharing of client data

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Japan's securities watchdog recommended on Friday that the banking and securities units of Mitsubishi UFJ Financial Group opens new tab (MUFG) be penalised for what it said was unauthorised sharing of client information. The Securities and Exchange Surveillance Commission (SESC) made the recommendation to the banking regulator, the Financial Services Agency (FSA), which hands out such punishments in Japan. The recommendation, which was widely expected, followed the SESC's investigation into MUFG's banking arm, MUFG Bank, and its two brokerage ventures with Morgan Stanley (MS.N), opens new tab. The investigation found that confidential client information had been shared between MUFG Bank and one of the two securities firms on at least 26 occasions between 2020 and 2023. MUFG Bank also illegally offered preferential lending rates to clients that did business with the group's two securities brokerages, the SESC said. Japan's "firewall" regulations prohibit banks and securities companies in the same group from sharing customer data with one another without the customer's consent. The investigation found no evidence of insider trading, but monitoring and internal controls were lacking, the SESC said. MUFG group companies will make every effort to strengthen control systems in light of the recommendation and will take measures to prevent recurrence, the parent company said in a statement. The two brokerages were established in 2010, two years after MUFG invested in Morgan Stanley at the height of the global financial crisis in 2008. MUFG owned around 23% of Morgan Stanley as of March 2024.

Japan’s securities watchdog recommended on Friday that the banking and securities units of Mitsubishi UFJ Financial Group  opens new tab (MUFG) be penalised for what it said was unauthorised sharing of client information.

The Securities and Exchange Surveillance Commission (SESC) made the recommendation to the banking regulator, the Financial Services Agency (FSA), which hands out such punishments in Japan.

The recommendation, which was widely expected, followed the SESC’s investigation into MUFG’s banking arm, MUFG Bank, and its two brokerage ventures with Morgan Stanley (MS.N), opens new tab.

The investigation found that confidential client information had been shared between MUFG Bank and one of the two securities firms on at least 26 occasions between 2020 and 2023.

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MUFG Bank also illegally offered preferential lending rates to clients that did business with the group’s two securities brokerages, the SESC said.

Japan’s “firewall” regulations prohibit banks and securities companies in the same group from sharing customer data with one another without the customer’s consent.

The investigation found no evidence of insider trading, but monitoring and internal controls were lacking, the SESC said.

MUFG group companies will make every effort to strengthen control systems in light of the recommendation and will take measures to prevent recurrence, the parent company said in a statement.

The two brokerages were established in 2010, two years after MUFG invested in Morgan Stanley at the height of the global financial crisis in 2008. MUFG owned around 23% of Morgan Stanley as of March 2024.

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