Summary
GameStopstocks surged in value after meme stock investor Roaring Kitty made their return to social media after nearly three years. The investor’s return does not positively or negatively impact the uncertain future ofGameStop, but many investors are rallying behind the volatile stock value.
Back in March 2024, a report painteda bleak future for GameStopdue to declining revenue for the fourth quarter of 2023. Analyst Michael Pachter suggested that GameStop’s revenue and sales would decline to an “unsustainable” level in the near future. This decline is attributed to the increasing sale of games by online competitors like Amazon and eBay. Despite uncertainty about the long-term future of GameStop, investors are still eager to rally behind the company’s stock.
On the night of May 12, the Roaring Kitty Twitter account run by Keith Gill signaled his return to social media with a new post, which depicts an image of a man beginning to sit upright and focus on a game. This same image was posted by GameStop back in February, so many users guessed thatthe valuation of GameStop stockswould be greatly affected. According toCNN, GameStop stocks went on to surge 74% on Monday morning after Roaring Kitty posted on Twitter, and the account proceeded to post even more tweets that would help the stock surge by 110% to $36.70 and maintain its value around the $30 mark. What’s more, stock trading for GameStop shares was halted several times due to volatility. Data company S3 Partners claims that short sellers saw $1 billion in mark-to-market losses betting against GameStop. Many sellers aimed to turn profits on stocks by borrowing, selling, and returning shares after purchasing them at a lower price.
GameStop Stock Value Surges After Roaring Kitty’s Return
Although stock trading was halted, a Robinhood spokesperson reached out to CNN to clarify that the company did not shut down the purchase of GameStop shares. According to Robinhood, GameStop shares saw elevated volatility and movement, which triggered market-wide exchange limits and halts. The halts to stock trading were not specific or limited to Robinhood, similar to halts that came as a response toGameStop’s stock surge in 2021.
GameStop still has a chance to grow its business in new areas. For example,GameStop will soon start buying and sellingPokemon TCGsingles, marking a new venture for the company. GameStop plans to accept only PSA 8-10 gradedPokemoncards valued at up to $500. The company may expand its services to stores nationwide if the venture shows early signs of success.
