The meteoric rise of GameStop (GME) stock, fueled by a retail investor frenzy and celebrity involvement, appears to be cooling off dramatically. After a week marked by significant price fluctuations, the stock has shed over 50% of its value in the last two days, wiping out a substantial portion of the profits enjoyed by popular investor Keith Gill, also known as Roaring Kitty.
Gill, who became a central figure in the GameStop saga thanks to his vocal support and large GME holdings, reportedly saw his position plummet by over $350 million in the past week. This comes after his GME options reached a peak value of $382 million last Thursday. By Friday, however, his position had suffered a significant blow, losing more than $235 million. The decline continued through Monday, with GME dropping another 12% after a weekend plunge of 40%.
This rapid decline coincides with skepticism from industry analysts regarding GameStop’s long-term prospects. Michael Pachter, a GameStop analyst at Wedbush, expressed doubts about the company’s ability to achieve a meaningful turnaround, questioning the sustainability of any boost provided by retail investor interest. Pachter specifically mentioned the potential for a short-lived effect from Gill’s involvement, suggesting that the recent price surge might be temporary.
“We suspect that Friday’s live stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough for the company to complete its [at-the-market share offering],” Pachter said, “but with no clear strategy, we suspect the share price will once again begin to descend and approach our new price target.”
The cooling off of the GameStop frenzy extends beyond the traditional stock market. The meme coin $GME, inspired by the GameStop saga, also witnessed a dramatic decline. After rallying by nearly 5000% in the first week of June, the meme coin has shed 25% of its value in the past 24 hours. Currently trading at $0.01596 with a market cap of $109 million, the daily trading volume for $GME has also dropped significantly by 47% to $116 million.
Also Read: Is GME The Next Meme Coin Moonshot? Social Media Frenzy Reignites GameStop Mania
With the GameStop saga taking a sharp turn, it remains to be seen if the stock can regain its momentum or if this marks the end of the retail investor-driven rally. Investors keeping a close eye on the situation should be aware of the inherent volatility associated with meme stocks and factor in expert analysis before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
