Raphael Stevens

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    Fed holds rates steady, indicates only one cut coming this year

    The Federal Reserve on Wednesday kept its key interest rate unchanged and signaled that just one cut is expected before the end of the year.
    The Federal Open Market Committee also indicated that it believes the long-run interest rate is higher than previously indicated.
    “In recent months, there has been modest further progress toward the Committee’s 2 percent inflation objective,” policymakers wrote in a statement.

    The Federal Reserve on Wednesday kept its key interest rate unchanged and signaled that just one cut is expected before the end of the year.
    With markets hoping for a more accommodative central bank, Federal Open Market Committee policymakers following their two-day meeting took two rate reductions off the table from the three indicated in March. The committee also signaled that it believes the long-run interest rate is higher than previously indicated.

    New forecasts released after this week’s two-day meeting indicated slight optimism that inflation remains on track to head back to the Fed’s 2% goal, allowing for some policy loosening later this year.
    “Inflation has eased over the past year but remains elevated,” the post-meeting statement said, echoing language from the last statement. In the only substantive change, the new statement followed with, “In recent months, there has been modest further progress toward the Committee’s 2 percent inflation objective.”
    The previous language said there had been “a lack of further progress” on inflation.
    Traders seemed encouraged by these comments, with the S&P 500 jumping to a record Wednesday after the statement was issued.

    Aggressive cutting seen for 2025

    For the period through 2025, the committee now sees five total cuts equaling 1.25 percentage points, down from six in March. If the projections hold, it would leave the federal funds rate benchmark at 4.1% by the end of next year.
    Another significant development occurred with the projection for the long-run rate of interest, essentially a level that neither boosts nor restricts growth. That moved up to 2.8% from 2.6%, a nod that the higher-for-longer narrative is gaining traction among Fed officials.
    In a further indication of a hawkish bent from central bankers, the dot plot showed four officials in favor of no cuts this year, up from two previously.

    Return to 2% target

    Elsewhere in the FOMC’s Summary of Economic Projections, participants raised their 2024 outlook on inflation to 2.6%, or 2.8% when excluding food and energy. Both inflation projections were 0.2 percentage point higher than in March.
    The Fed’s preferred inflation gauge is the Commerce Department’s personal consumption expenditures price index, which showed respective readings of 2.7% and 2.8% for April. The Fed focuses more on core inflation as a better long-term indicator. The SEP indicates inflation returning to the 2% target, but not until 2026.
    The decision and informal forecasts from the 19 meeting participants come during a volatile year for markets and investors’ hopes that the Fed would start easing after it raised benchmark rates to their highest level in some 23 years.
    The federal funds rate, which sets overnight borrowing costs for banks but feeds into many consumer debt products, is targeted in a range between 5.25%-5.50%, the result of 11 rate increases between March 2022 and July 2023.
    Earlier in the day, as Fed officials were preparing their economic and rate outlooks, the Bureau of Labor Statistics released the consumer price index for May. The report showed that inflation was flat on the month while the annual rate edged lower from the rate in April to 3.3%.  
    During a press conference, Powell said that report was better than almost anyone had expected, and was factored into the FOMC’s decision.
    “We see today’s report as progress and as, you know, building confidence,” Powell said. “But we don’t see ourselves as having the confidence that would warrant beginning to loosen policy at this time.”
    Inflation remains well above the Fed’s 2% target, while also being considerably below the peak of just over 9% seen nearly two years ago. Core readings excluding food and energy prices were at 0.2% from the prior month and 3.4% from the year-ago period.
    In the first quarter of 2024, economic data softened from where it had been for most of the previous year, with GDP rising at just a 1.3% annualized pace. April and May have been a mixed bag for data, but the Atlanta Fed is tracking GDP growth at 3.1%, a solid pace especially in light of persistent recession worries that have dogged the economy for the past two years.
    Inflation data, though, has been equally resilient and has posed problems for central bankers.
    The year began with markets expecting a vigorous pace of rate cuts, only to be thwarted by sticky inflation and statements from Fed officials that they are unconvinced that inflation is heading back convincingly to target.
    “This is a nothing-burger Fed meeting. They know conditions are improving, but don’t need to rush with rate cuts,” said David Russell, global head of market strategy at TradeStation. “The strong economy is letting Jerome Powell wring inflation out of the system without hurting jobs. Goldilocks is emerging but policymakers don’t want to jinx it.”

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    Here’s the Fed’s new rate forecast that’s moving the markets

    Federal Reserve Bank Chair Jerome Powell announces that interest rates will remain unchanged during a news conference at the bank’s William McChesney Martin building on May 01, 2024 in Washington, DC. 
    Chip Somodevilla | Getty Images

    The Federal Reserve on Wednesday projected only one rate cut for the remainder of 2024, down from its March forecast that called for three reductions.
    The central bank’s “terminal rate” for 2024, or the rate at which its benchmark fed funds rate will peak, went up to 5.1%, equivalent to a target range of 5%-5.25%. That means that the Fed is only forecasting one quarter-point rate cut from the current target range of 5.25% to 5.5%.

    The so-called “dot plot,” which indicates how 19 FOMC members, both voters and nonvoters, showed four officials in favor of no cuts this year, while seven members projected one reduction. The remaining eight officials forecast two rate cuts for 2024.
    Here are the Fed’s latest targets:

    Arrows pointing outwards

    Back in March, the Fed projected three rate cuts this year with the fed funds rate hitting 4.6%. After a cool inflation report Wednesday but before the Fed’s new forecast release, traders were pricing in two cuts this year.
    For 2025, the central bank anticipated four rate cuts in total or a full percentage point reduction in the benchmark fed funds rate. More

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    Fisker recalls thousands of Ocean EVs for safety and compliance issues

    EV maker Fisker issued voluntary recalls for its Ocean SUV due to software-related issues.
    The company plans to fix these software issues through an over-the-air update process.
    The recall was announced amid three open NHTSA investigations into Fisker.

    The Fisker Ocean electric sports utility vehicle (SUV) during AutoMobility LA ahead of the Los Angeles Auto Show in Los Angeles, California, U.S., on Wednesday, Nov. 17, 2021. 
    Kyle Grillot | Bloomberg | Getty Images

    Electric vehicle startup Fisker announced on Wednesday that it is recalling thousands of Ocean SUVs in North America and Europe due to issues with vehicle software and will roll out an over-the-air software update.
    The company recalled 11,201 Oceans across the U.S., Canada, and Europe due to safety issues. The affected vehicles potentially had issues with the Motor Control Unit and Vehicle Control Unit software, which could make the vehicle lose motor power, the company said in a press release.

    Fisker also recalled 6,864 Oceans in the U.S. and 281 in Canada for compliance reasons. The company said the vehicles do not currently comply with federal vehicle safety standards related to gauges and telltale icons in the cluster display.
    Fisker said that vehicles updated to OS 2.1 are not impacted by the recall. Fisker anticipates completing the software update process by June 30, 2024. 
    The recalls come after months of setbacks for Fisker. Reuters reported in February that the company may not be able to continue as a going concern due to high interest rates causing a slowdown in demand. 
    Fisker’s struggles continued into March as talks for a potential deal with an unnamed large automaker collapsed, and the New York Stock Exchange announced plans to delist the startup’s shares due to “abnormally low” price levels. 
    In April, Reuters reported that the U.S. auto safety regulator opened an investigation into the 2023 Ocean due to complaints over the vehicles’ doors failing to open. This marked the National Highway Traffic Safety Administration’s third probe into Fisker — additional investigations are open due to issues with the 2023 Ocean’s brakes and unintended vehicle movement.

    Fisker delivered 4,929 Oceans in 2023, the company said in February when announcing its full-year financial results, the most recent report available. The company said it expected to deliver between 20,000 and 22,000 vehicles in 2024.
    The company said it informed its dealers of the recalls on May 30 and will notify owners by June 30.

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    Southwest CEO vows change as activist investor pushes for new leadership

    Southwest Airlines CEO Bob Jordan said the company is ready to adapt to changing customer trends like premium seating as demand shifts.
    Jordan’s comments came days after hedge fund Elliott Management disclosed a nearly $2 billion stake in Southwest and said it wants to replace the carrier’s CEO and chairman.
    Southwest said in April that it was weighing changes to its longtime business model while rivals capitalize on travelers willing to pay more to fly.

    A Southwest commercial airliner takes off from Las Vegas on Feb. 8, 2024.
    Mike Blake | Reuters

    Southwest Airlines CEO Bob Jordan said the company is ready to adapt to changing customer trends like premium seating as pressure from an activist investor mounts.
    “We will adapt as our customers’ needs adapt,” Jordan said at an industry event hosted by Politico on Wednesday.

    Jordan’s comments came two days after hedge fund Elliott Management disclosed a $1.9 billion stake in Southwest and said the carrier needs a new CEO and new chairman.
    In April, Jordan told investors that the airline is considering major changes to its product, potentially ditching its system of unassigned seating that has made the Dallas-based carrier a standout among airlines, and even reevaluating its single class of service.
    Jordan reiterated those considerations Wednesday, saying that the airline, which started flying in 1971 and now carries more passengers in the United States than any other, is in its “third generation.” He said the airline’s leaders are open to big shifts to increase revenue, while rivals like Delta and United capitalize on customers willing to pay up for a seat with more space or other perks.
    Elliott didn’t immediately respond to a request for comment about Jordan’s remarks on Wednesday.
    Southwest on Monday said in response to the activist campaign that its board backed the company’s leaders and the airline’s strategy, while it will also “look forward to further conversations with Elliott.”

    Southwest has struggled with weaker margins than some of its competitors as it faces increased airline capacity in the U.S., shifting post-pandemic travel patterns and a spiraling problem that is out of its control: delays of new planes from Boeing, its sole aircraft provider, as that company grapples with several manufacturing and safety crises. The airline expects to receive just 20 Max jets from Boeing this year, down from an earlier forecast for close to 80 new planes.
    Southwest had also taken months to find its footing after a year-end holiday meltdown in 2022 cost it more than $1 billion. The company later acknowledged its technology couldn’t handle the hundreds of flight and crew changes triggered by a winter storm, prompting it to quickly upgrade its system.
    Meanwhile, Jordan said Southwest has continued to work toward improving the customer experience. It’s upgraded its inflight Wi-Fi and added power outlets on its fleet of Boeing 737s in recent years.
    “I think customer preference is going beyond that,” Jordan said Wednesday. The carrier has spent months surveying customers to figure out what changes are needed, he added.
    “It’s been several years since we last studied this in-depth, and customer preferences and expectations change over time,” an airline spokeswoman told CNBC. “We are also studying the operational and financial benefits of any potential change.”
    — CNBC’s Rohan Goswami contributed to this article.

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    Keith Gill has some tough choices to make on his GameStop options with Wall Street ready to pounce

    Meme stock champion Roaring Kitty, whose real name is Keith Gill, held onto his positions of 5 million GameStop common shares and 120,000 call options.
    If his position is in the money, many suspect that Gill won’t have the capital to exercise the options and E-Trade may have to intervene.
    Gill could start selling his calls early to turn a quick profit and avoid the drama in a week and a half, but many argue that it’s not a good look for the champion of the stock.

    Keith Gill, a Reddit user credited with inspiring GameStop’s rally, during a YouTube livestream arranged on a laptop at the New York Stock Exchange on June 7, 2024.
    Michael Nagle | Bloomberg | Getty Images

    As Roaring Kitty continues to watch his favorite GameStop shares swing wildly, he might be contemplating what to do with his massive options position that is approaching expiration.
    The meme stock champion, whose real name is Keith Gill, has so far held onto his positions of 5 million GameStop common shares and 120,000 call options, according to a screenshot he shared Monday evening. The mammoth options position — involving 12 million underlying GameStop shares — could be a nightmare for Gill to offload or exercise even if the calls end up profitable or “in the money.”

    His call options against GameStop have a strike price of $20 and an expiration date of June 21. Shares of the video game company have gained about 8% so far this week to around $30 a share. If the stock trades above $20 that Friday, which makes his call position in the money, Gill could exercise the options at $20 apiece, allowing him to purchase an additional 12 million shares at the discounted price. However, many think it’s unlikely he has enough capital to pull off such a move.

    Loading chart…

    For Gill to exercise the calls, he would need to have $240 million to take custody of the stock (12 million shares bought at $20 apiece). His last screenshot showed he has $29.4 million in cash in his E-Trade account, though he could deposit more money from other undisclosed accounts.
    During Friday’s livestream, Roaring Kitty told some 600,000 viewers that he doesn’t have any institutional backers, but he didn’t entirely rule out the possibility of having more cash elsewhere.

    E-Trade dilemma

    Let’s say he doesn’t have the $240 million to exercise the calls. As June 21 looms, his broker E-Trade may have to intervene by liquidating his options before expiration.
    “If they remain in the money and he doesn’t close them, the brokerage may be forced to take action on his behalf,” said CC Lagator, co-founder of brokerage Options AI.

    The Morgan Stanley-owned E-Trade declined to comment.
    E-Trade’s client agreement for self-directed accounts stated that the brokerage may decline, cancel or reverse a client’s orders or instructions at its discretion and without notice.
    If Gill doesn’t give an instruction prior to expiration, the broker could sell the contracts that his cash balance doesn’t support, or submit a “do not exercise” (DNE) order for the same amount.
    “The DNE option would be extremely costly as it marks them at zero. I’d imagine they would be in contact in the days ahead to make sure he has a plan. They can’t wait until the last hour,” Lagator said.
    E-Trade has been debating whether to ban Gill from the trading platform over concerns regarding potential market manipulation, The Wall Street Journal reported last week.
    Selling early?
    Theoretically, Gill could start selling his calls early to turn a quick profit and avoid the drama in a week and a half, but many argue that it’s not a good look.
    “He definitely has the public perception that’s perhaps to some degree stopping him from selling because then he would definitely be marked as a manipulator, kind of like a modern-day pump-and-dump scheme,” said Tony Zhang, chief strategist at OptionsPlay.
    Meanwhile, market participants would easily catch wind of his sale given the sheer size of his position, said traders. His active selling could also put downward pressure on the stock and it could inspire his legion of retail traders to follow suit.
    The Securities and Exchange Commission has been monitoring GameStop’s options trading activity, while Gill is under the scrutiny of the Massachusetts securities division.
    Rolling the options
    Gill also has the costly option to roll those calls to a further expiration date to buy some time, which means exiting the current position and immediately entering a similar position. He could opt for that up until 4 p.m. ET on June 21.
    “It’s not something you just want to sit there doing on your laptop in the last hour. It’s too big. Again, if he’s in contact with them, it would be in his best interest to be working with their risk teams and trading desks, if rolling is his plan,” Lagator said.
    If Gill holds the calls to expiration date with the stock falling below $20, this position would expire worthless. It cost him more than $60 million to acquire the position.
    ‘Options 101’
    Still, if Gill somehow comes up with enough money to exercise all of his calls, it would leave him a total of 17 million shares and he would become the fourth-biggest shareholder in GameStop, behind Vanguard, BlackRock and Ryan Cohen’s RC Ventures, according to FactSet.
    Alternatively, he could sell his other 5 million shares of GameStop to help fund the transaction to exercise the calls, but still, the stock would have to trade above $48 for him to secure enough money, nowhere near where it is now.
    On Tuesday, Gill made light of his dilemma, posting on X a meme of a banana reading “Options Basics 101.”

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    At Stellantis investor day, cost cuts and China come into focus

    Stellantis CEO Carlos Tavares and other executives are expected to address Chinese competition, capital discipline, forthcoming products, software initiatives, and potentially, further cost reductions
    The parent of brands like Ram and Jeep has set ambitious financial targets for 2030.
    Stellantis has aggressively cut operations under Tavares, with some executives describing the measures as difficult or grueling.

    Stellantis CEO Carlos Tavares holds a news conference after meeting with unions, in Turin, Italy, March 31, 2022.
    Massimo Pinca | Reuters

    DETROIT – Since spearheading a merger to create Stellantis in 2021, CEO Carlos Tavares has been on a cost-cutting mission. That’s beginning to pay dividends for the company and investors.
    How the trans-Atlantic automaker expects to keep that momentum amid uncertainty surrounding all-electric vehicles and increasing competition from Chinese automakers is expected to be in focus this week as Tavares leads the automaker’s investor day Thursday.

    Tavares and other executive are expected to address Chinese competition, capital discipline, forthcoming products, software initiatives, and potentially, further cost reductions as the company aims to achieve ambitious financial targets by 2030.
    When Tavares’ PSA Groupe merged with Fiat Chrysler in January 2021, the freshly combined company set out to reduce spending by 5 billion euros, or about $5.4 billion, annually. It’s a target the company says it will achieve in 2024, a year ahead of schedule.

    More recently, Tavares has said the parent of brands like Ram and Jeep needs to remove 40% of its costs to be able to profitably produce and sell EVs to mass-market consumers, citing the need for affordable models despite higher costs to manufacture the vehicles.
    “We are not in the race to transition to EVs, but in a race to cut cost on EVs,” Tavares said in late May during a Bernstein investor conference.
    The cuts are part of Stellantis’ strategic plan to increase profits and double revenue to 300 billion euros by 2030. The plan also includes targets such as achieving adjusted operating profit of more than 12% and industrial free cash flow of more than 20 billion euros.

    The cost-saving measures have included reshaping the company’s supply chain and operations as well as headcount reductions.
    Several Stellantis executives described the cuts to CNBC as difficult but effective. Others, who spoke on the condition of anonymity due to potential repercussions, described them as grueling to the point of excessiveness.
    Since the merger was agreed to in December 2019, Stellantis has reduced headcount by 15.5%, or roughly 47,500 employees, through 2023, according to public filings. Additional job cuts this year involving thousands of plant workers the U.S. and Italy have drawn the ire of unions in both countries.
    Meanwhile the associated billions in operational savings have helped to increase the automaker’s adjusted operating income by 31% from 2021 through last year. Its adjusted profit margin is also up, rising 0.4 percentage point during that time frame to 12.8%.

    Stellantis Chief Technology Officer Ned Curic said the company is operating far more efficiently than before, including “proper system engineering” to ensure it’s optimizing design and function for its new vehicles.
    Curic, who joined the company from Amazon in 2021, said headcount reductions, including laying off about 400 U.S. engineers in March, come after the company completed many of its systems for the next decade.
    “We’ve been cutting headcounts, but we really don’t need that many,” he said during an interview last month, adding the company still employs 50,000 or so engineers. “To engineer the systems for our 10-year road map, it’s already done.”

    Tavares, when asked last month whether additional cuts would be needed in the U.S., said “we’ll see.” He said officials “still have work to do” when it comes to getting EVs to be as profitable as traditional internal combustion engine, or ICE, vehicles.
    “There is no silver bullet here. You need to throw 40% of additional cost because the middle class in the U.S. as much as the middle class of Europe, they need to buy EVs at the price of ICEs,” he said during a media roundtable in May. “This is no surprise. You can check my comments for the last five years. I’ve been running the same stuff for five years.”

    Wall Street expectations

    Future cost-saving efforts could be part of the company’s Thursday capital markets day.
    Executives on Thursday will outline developments across Stellantis’ regions and businesses, including its capital and operational disciplines, according to Stellantis CFO Natalie Knight.
    “We want to help you better understand how we see the industry evolving, how we’re leveraging standout technology, our leading operational discipline, and other competitive advantages that distinguish ourselves further,” she told investors in April. “And how we’re building a powerful and productive capital discipline that help us maintain and maximize sustainable returns.”
    Stellantis declined to disclose any specifics ahead of the event, which is taking place at its North American headquarters in Auburn Hills, Michigan.

    Carlos Tavares, CEO of Stellantis, poses during a presentation at the New York International Auto Show in Manhattan, New York, on April 5, 2023.
    David Dee Delgado | Reuters

    Wall Street will be looking for executives to address the company’s growing U.S. vehicle inventory levels, upcoming product launches and plans for China.
    At the start of May, Cox Automotive reported days’ supply of vehicles at Stellantis’ Jeep and Ram brands were more than twice the industry average of 76 days.
    Meanwhile the threat of cheaper, Chinese-made EVs looms in the background.
    Tavares has called Chinese automakers his “No. 1 competitor” and said the company is taking an “asset-light” strategy. That includes plans to quickly grow vehicle exports from the country through a Stellantis-controlled joint venture with China’s Leapmotor.
    “The share price reaction to the [capital markets day] will likely be driven by how these short-term concerns are addressed. We don’t expect any new financial targets to be announced,” UBS analyst Patrick Hummel wrote in a Thursday investor note.

    Stock chart icon

    Stellantis, GM and Ford shares

    Hummel and other analysts have noted a divergence in Stellantis’ stock performance compared with that of General Motors and Ford Motor.
    Stellantis’ U.S.-traded shares are down more than 6% this year and off roughly 30% from an all-time high of more than $29.50 per share in March. GM shares in contrast are up more than 30% this year, and Ford shares are essentially flat.
    RBC Capital Markets analyst Tom Narayan notes Stellantis, which has a roughly $68 billion market cap, should return 7.7 billion euros to shareholders in 2024 — 4.7 billion euros in dividends and 3 billion euros in buybacks.
    Redburn Atlantis analyst Adrian Yanoshik last week in a note said largely muted expectations raise the potential for Stellantis to outperform expectations.
    — CNBC’s Michael Bloom contributed to this report. More

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    Influencer Jake Paul launching men’s skin care line at Walmart

    YouTube influencer and boxer Jake Paul is launching a personal skin-care line for men.
    The line, which will be called W, looks to tap into the growing market for men’s grooming products.
    The launch precedes Paul’s anticipated boxing event against Mike Tyson.

    Jake Paul is launching a personal care brand geared toward men.
    Courtesy: W

    Jake Paul is entering a new arena: skin care.
    The YouTube influencer-turned-boxer announced on Wednesday the launch of “W,” a skin-care company targeted toward men.

    The personal care line will feature products priced at less than $10 and will be available at Walmart. Later this summer, an expanded product line will be available on Amazon.
    “We saw this old and outdated category where the competitors have been on the shelves in the exact same way for the past 20 years,” Paul told CNBC. “We just believed we had a better vision, better product and could disrupt this entire space.”
    W, a reference to “winning,” will launch with three products: a body wash, body spray and antiperspirant deodorant. Paul said the company hopes to expand with a shampoo and conditioner, face wash and hair gel in the coming months.

    W retails for under $10 and will be available at Walmart and Amazon.
    Courtesy: W

    “It’s a super underserved market,” he said. “I believe now that more men are caring about how they look and what they are putting into their body,” he added.
    As men have prioritized skin care and other beauty products in recent years, the men’s grooming category has seen strong growth. From 2018 to 2023, men’s grooming was a $28 billion business globally, with an annual compound growth rate of more than 5%, according to market research company Euromonitor.

    And it’s expected to keep seeing gains. Men’s personal care is expected to grow to more than $100 billion over the next four years, with an annual compound growth rate of nearly 10%, The Business Research Company projects.
    Paul isn’t alone in trying to tap into the market. Other celebrities, including Dwayne “The Rock” Johnson, John Legend, Idris Elba and Pharrell, have recently launched skin-care lines targeting less traditional markets.
    Young men are increasingly turning to social media and influencers for their sources of information. A Euromonitor report said that 50% of Gen Z male respondents found information about a brand, company or product through TikTok in 2023, an increase from 36% in 2022.

    Boxer Jake Paul visits the factory of his new personal care line W.
    Courtesy: W

    Paul said he’s taking a page from his brother Logan Paul’s success with Prime, a sports drink that’s popular with boys and young men, though the caffeinated energy drink version of Prime has drawn scrutiny in the past.
    “Me and my brother are like the testosterone Kardashians,” Jake Paul said, with a nod to the success that the Kardashian sisters have had launching their own skin care lines. But Paul thinks the Kardashians and other celebrities have overlooked the opportunity for young men.
    “There’s a big open market for creator-led products focused on boys,” he added.
    He’s also hoping that his upcoming Netflix fight, in which he’ll face famed boxer Mike Tyson, will help create some momentum for the brand, though it was recently postponed.
    “It’s still gonna be a brawl and we both plan on ripping each other’s heads off,” he added. More

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    GameStop raises more than $2 billion by selling 75 million shares, capitalizing on meme frenzy

    Merchandise lines the shelves of a GameStop store on May 28, 2024 in Miami, Florida. 
    Michael Nagle | Bloomberg | Getty Images

    GameStop raised more than $2 billion in a recent stock sale as the video game company took advantage of a revived meme rally sparked by the return of trader Roaring Kitty.
    The retailer announced Tuesday evening that it completed an at-the-market equity offering, selling the maximum number of 75 million shares to raise proceeds of $2.14 billion. GameStop said it intends to use the money for general corporate purposes, which may include acquisitions and investments.

    The stock dipped more than 1% in premarket trading Wednesday. The shares continued their roller-coaster ride this week, up 8% so far.

    Loading chart…

    Wedbush GameStop analyst Michael Pachter estimated that the sale had an average share price of $28.50, implying that it coincided with the big sell-off during meme stock leader Roaring Kitty’s Youtube livestream last Friday.
    GameStop shares dropped 40% on Friday after the company released its earnings report days ahead of schedule, reporting that sales declined 29% in the first quarter.
    Roaring Kitty, AKA Keith Gill, hosted his first livestream in a few years that day, which seemed to exacerbate the sell off. Gill reiterated his previous investing thesis and offered little new reasoning behind his large stake. He revealed that he did not have any institutional backers and the GameStop positions he had shared in screenshots were his only bets.
    Pachter has an underperform rating on GameStop and a 12-month price target of $11, which is more than 60% lower than Tuesday’s close of $30.49.

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