GameStop stock rebounds following viral post from bull trader
GameStop's stock is on another rollercoaster following a viral social media post that reignited the meme stock mania.
Following a chaotic week, GameStop stock saw early gains in Monday's premarket trading, thanks to a livestream and social media post from popular investor Keith Gill, also known as Roaring Kitty.
The stock, which had plunged 39% on Friday to $28.22—its worst drop since early 2021—rebounded 6.3% to $30.
GameStop recently released its first-quarter earnings report, which showed slower sales and a larger loss than analysts had expected. This is yet another proof that the company's transformation is more challenging than expected.
In addition to the earnings report, GameStop announced plans to sell up to 75 million additional shares, which has caused concern among investors and contributed to the stock's recent volatility.
Baird analysts said they "have limited confidence in the company’s ability to restore growth and drive further operating efficiency."
"Roaring Kitty," however, is still feeling bullish about the company.
Is Roaring Kitty playing games again?
Keith Gill, also known as Roaring Kitty, has been quite busy lately stirring up sentiment about GameStop.
On Saturday, he posted a meme from the film "The Dark Knight" on X that quickly went viral, sparking a frenzy of speculation about his position on GameStop.
Gill didn't stop there. He hosted his first livestream in three years on Friday, attracting a massive audience of 630,000 people eager to hear him share his thoughts while he sipped his beer.
Gil said he feels positive about GameStop and CEO Ryan Cohen's strategy.
"It becomes kind of a bet on the team. And from what I've seen so far, I think — I reserve the right to change my mind, as you should too — I'm a believer right now,” Gill said in his livestream.
"Let's see what happens from here. But I think with a significant amount of capital, I don't know, let's see. Let's see where it goes from here."
Meanwhile, a GameStop-themed cryptocurrency, or meme coin, also surged in value, driven by the social media hype and speculative trading.
Gill has come under fire lately for his role in manipulating meme stocks. E-Trade is reportedly considering removing Gill from its platform due to his significant influence and the resulting market volatility.
GameStop chatter brings back meme-ories from 2021
The recent volatility in GameStop's stock price is reminiscent of the meme stock mania of early 2021.
Meme stocks are shares of companies that gain popularity and see their prices surge due to viral social media activity rather than traditional financial metrics.
In early 2021, online communities like Reddit's WallStreetBets coordinated large-scale buying of GameStop stock, creating a short squeeze that sent its price soaring.
Roaring Kitty played a pivotal role by posting analysis and memes that rallied retail investors to buy GameStop shares, driving the stock to unprecedented highs.