GameStop’s stock price jumped 40 percent before Wall Street opened Monday — all because an infamous web forum user posted on social media.
The memestock received a new lease of life after Keith Gill, known as “RoaringKitty” on YouTube and “DeepF***ingValue” on Reddit, broke a three-year silence with a post on X, formerly Twitter.
Mr. Gill was a former marketer at an insurance company who was credited with launching the 2021 GameStop memestock shorts debacle, according to The Associated Press.
He became a cause celebre in 2021 after his posts on the Wallstreetbets subreddit sparked a battle on Wall Street between thousands of small retail investors and large hedge funds who were massively betting against GameStop’s survival, selling its shares short.
The gathering was unprecedented in the modern era and inspired the 2024 film. Stupid money.
On Sunday, Mr Gill posted a sketch on X depicting a man leaning forward in his chair – recognizable to his audience as a way of saying “things are about to get heated”.
He then posted an old YouTube video saying, “That’s it for now because I’m out of breath.” For your information, here is a short 4 minute video that I made to summarize the $GME bull case.
His dramatic comeback on social media, coupled with his insinuation that something big was on the horizon, appears to have been devoured by memestock traders – sending the stock price skyrocketing.
However, despite the enthusiasm, nothing has actually happened at GameStop to justify investors’ newfound optimism, according to Art Hogan, chief market strategist at B Riley Wealth.
He said it was not the company, but rather Mr Gill, who “seems to be the most likely suspect for today’s renewed interest”, adding that he wanted to “be careful not to characterize participants in this investor phenomenon”.
“There is no fundamental change in any of the businesses popularized by this phenomenon,” he said. Reuters.
Popular memestocks – like the market in general – are doing well this year.
Shares of GameStop Corp., in steady decline since 2021, are up 57% this month.
For comparison, AMC Entertainment Holdings Inc. is up 10 percent over the past 30 days; Koss Co., a headset maker, is up 37 percent this month, and BlackBerry, the formerly dominant smartphone maker, is up 4 percent. Retailer Bed, Bath & Beyond, another meme stock, filed for bankruptcy protection last year.
That said, 2021 meme traders are still way behind on their investments; even with a 57% rise in May, the stock’s value is still 80% below its 2021 high.
Thomas Hayes, president of Great Hill Capital LLC, said Reuters that market conditions have changed in ways that are likely to prevent another meme stock craze from taking off — such as the end of the pandemic.
“There was a time when a bunch of people were stuck at home with free money and nothing to do and that’s not the case anymore,” he told the outlet.
yahoo
