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GameStop (GME) shares registered a 75% gain after Roaring Kitty shared a screenshot of the company’s $175 million holdings.?
The GME shares added 75% of gains during the open market, settling at $28 on June 3. In total, last month, GameStop stock rose by 74% in price.
The main impetus for the increase was the revelation by a US financial analyst and investor, Roaring Kitty. Late June 2, he posted a $175 million holding in the video game retailer on Reddit.
GME YOLO update – June 2 2024
byu/DeepFuckingValue inSuperstonk
As the screenshot above shows, Roaring Kitty purchased 5 million shares at an average price of $21.74. The shares traded at $38 before the trading was halted for volatility. Additionally, the account also shows a total of 120,000 options contracts expiring June 21.
A few weeks ago, Market Strategist at Interactive Brokers Steve Sosnick said that he was suspicious of the surge in GameStop’s share price as it didn’t build on any news regarding the company. He compared the wild upside swings in the stock to Bed Bath & Beyond in August 2022 when Ryan Cohen, current CEO of GameStop, bought it and sold it during the rally. Bed Bath & Beyond is now bankrupt.
The company has sold 45 million shares, resulting in $930 million in proceedings.
Who is Roaring Kitty?
The Roaring Kitty is a YouTube Channel run by Keith Gill. Gill began using the nickname in 2014 when he joined Twitter for educational purposes,?sharing insights about tracking investment opportunities with people.
Gill is known for spiking the GameStop surge in 2020 with the help of his YouTube.?In 2019, Gill posted about his bullish bets on GameStop stock on his Deep F (Value Reddit account). Gill has had an account on YouTube since 2015, and during the summer of 2020, he began rigorously posting videos and live-streaming clips about his bullish thesis.
The Roaring Kitty went silent in 2021. However, in May 2024, an X post suggested his comeback.
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
GameStop Price Prediction
With the surge in late 2020 and early 2021, GameStop (GME) has been on a consistent falling end in the past three years. With Gill’s return in May 2024, GameStop stocks rose 75% in the last month while registering an overall gain of 88% since the beginning of 2024.
Keeping in view the trajectory of GameStop stocks, Wall Street analysts shared their estimates regarding the performance of the stocks in the coming months.
Mostly, the analysts predict a decline on the part of GameStop stocks, with one suggesting a ‘sell’ while the other deeming it a ‘strong sell.’ Projection estimates range from a drop of 33.02% from its latest closing price, while the lowest one anticipates a 73.64% drop.
Nadir Khalid, co-founder of Alchemy Fellows, is an active stock trader and equity market enthusiast who monitors international stock movements. In a comment to Techopedia, he explained:
“A meme stock can never hold its hype for too long. GameStop is one of the most famous meme stocks that gained attention back in COVID-19. Not only me but every serious investor out there understands the actual set of circumstances of the company, you will be amazed by the fact that worsening company fundamentals back in 2021 also helped gain hype as the stock was an easy short for the hedge funds.”
Moreover, he added that this latest hype after a social media post by Roaring Kitty claiming to have nearly 2% of the firm’s stock will fade away in hours. It can only be good for swing traders, he concluded.
Matt Johnson, CEO at Primary Vision Network, told Techopedia:
“The recent GameStop hype feels like a loaded gun waiting to go off. The question isn’t if, but when institutional investors will bite back.”
Owing to the whimsical nature of market conditions, it is unlikely that the surge in GME’s stocks will sustain its position during the remaining part of the year.
