GameStop, the videogame and console retailer, witnessed a huge plunge in stock price despite a vocal pandemic-era viral supporter attempting to rally investors.
The person known as “Roaring Kitty” or Keith Gill took to YouTube to stream about the stock, commonly known as a “meme stock.” This type of stock sees viral popularity due to heightened social sentiment or a cultural event.
This person was responsible for the trading frenzy during the pandemic for GameStop stock but couldn’t repeat the feat after live streaming the company’s most recent financial earnings.
GameStop Stock on the slide
Despite Roaring Kitty/Gill’s attempts to say otherwise to an audience of 600,000 viewers, the share price took a 40% hit and ended a torrid week of trading.
As we reported, GameStop’s earnings failed to match the previous year’s after its annual report included uninspiring numbers. The retailer recorded a shortfall of $432 million in net sales compared to the previous year of trading.
In that rough April reporting period, the company had lost half a million compared to the previous year, CEO Nir Patel walked, and shares dipped by 17%.
When the company was at its lowest in some time, Gill reappeared from the blue in May —posting a cryptic social media post that galvanized a 110% surge to $38.20.
Spectators and experts were skeptical at that time. “It’s unlikely you’re going to see a repeat of meme stock mania for any sustained period of time because it was a point in time when you had a bunch of people stuck at home with free money, and that’s no longer the case,” Thomas Hayes, chairman at Great Hill Capital LLC said to Reuters.
Haynes was partly right, as GameStop looked to be getting back out of the rut, but this could have all been a ply by Gill. His return sparked a surge, but one that could not be maintained, as the events this week have proven.
It has long been rumored that he has millions in GameStop stock that could be worth around 100 million. The New York Stock Exchange had to pause trading on GameStop stock 15 times in one day, so there could be more to the story that Gill isn’t sharing, but time will tell if the fate of GameStop hinges on the whims of a social influencer.
Image: Ideogram.
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