On an exhilarating Monday, shares of GameStop, the video game retail giant, underwent an impressive rally. None other than “Roaring Kitty,” also known as Keith Gill, instigated this activity, making his grand return to the internet after a three-year hiatus.. This comeback, signified by a simple yet powerful image of a game player taking his game very seriously. Received 63,000 likes in just 13 hours.
Roaring Kitty’s influence shouldn’t be underestimated. His original posting and Reddit persona “DeepF——Value” inspired a horde of day traders to invest in GameStop’s shares. And call options between the years of 2020 and 2021. He was the catalyst for the “meme stock” frenzy, where investors took on hedge funds and short sellers. Who were betting against GameStop and other companies’ share values.
This Monday’s activity saw GameStop’s shares escalate by a staggering 70%, with momentary rises going as high as 110%. This precipitous climb prompted multiple pauses in trading due to its volatility. Interestingly, other meme stocks like AMC also enjoyed a 43% jump on the same day.
In technical terms, a short position in stock involves an investor borrowing shares at a certain price. Anticipating that the market value will fall below that level when it’s time to settle the account. In the case of GameStop, more than 24% of its freely available shares. Also commonly referred to as the float, are in a short position.
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Even hedge funds like Melvin Capital, who were heavily shorting GameStop, became the target of this crusade by amateur traders. They experienced significant losses, leading to the intervention of Ken Griffin’s Citadel and Point72 with nearly $3 billion in support.
GameStop, riding on this roller coaster ride, reached a peak stock price of $120 per share in early 2021. But, there is always another side to the coin. As interest from individual investors waned, so did GameStop’s stock value, which stooped to a new low of $9.95.
However, there seems to be a silver lining as recently, GameStop’s stock is making a comeback. This revitalization, coupled with the high level of short interest, may be what reignited Roaring Kitty’s involvement. Although GameStop’s business fundamentals depict a grim picture, the company’s stock ended on a high note last Friday, closing at $17.46.
This thrilling journey of GameStop and its army of amateur traders even caught Hollywood’s interest. Consequently, the 2023 movie, “Dumb Money,” featuring Paul Dano as Gill, was conceived.
The world of GameStop and its rollercoaster ride of stocks form an interesting story of individual players taking on the financial giants. As they continue to keep us on the edge of our seats, one can only wonder, what will be their next move?