Once more into the fray we venture. The resurgence of the manipulated meme-stock trading game is palpable. Credit, or perhaps blame, falls upon the GameStop (NYSE: GME) stock traders for this revival. While my stance might not garner me any popularity, I hold a bearish view on GME stock, foreseeing an ominous end to this frenzy, reminiscent of the aftermath of the 2021 hype cycle (refer to the chart below).
If anyone still has an ear for it, GameStop primarily deals in physical copies of video games, with digital copies being a secondary offering. Nowadays, gamers tend to opt for direct downloads or streaming services, sidelining GameStop's traditional model. The issue lies in the tendency of financial traders to have notoriously fleeting attention spans. However, you need not succumb to that trend.
Before committing your hard-earned capital to GameStop stock, I earnestly hope this message reaches you. Chances are, you'll regret it later on.
The Unconventional Catalyst Behind GameStop's Surge
Let me shed some light on the recent turn of events. Wall Street analysts scarcely cover GameStop, with the sole Wedbush analyst covering it being anything but bullish. Seasoned investors often overlook the company. However, GameStop's stock itself captured significant attention in 2021. Fast forward to May 13, 2024, and the original meme stock of the 2020s is once again at the forefront.
As highlighted by TipRanks contributor Shrilekha Pethe, along with Bloomberg and other sources, GME stock unexpectedly skyrocketed on Monday, doubling in price around 10:00 a.m. Eastern time. Thanks to Pethe's report, it became apparent that there were no company-driven catalysts on May 13, such as earnings reports or announcements from GameStop's CEO, Ryan Cohen.
Instead, what got meme-stock traders buzzing was a post from "Roaring Kitty," or @TheRoaringKitty, on social media platform X. Formerly an active Reddit user and a guru in meme stocks, "Roaring Kitty" made a post on X on Monday, marking his first appearance on X or Reddit since the peak of speculative fervor in 2021.
From his X post, it seems "Roaring Kitty" didn't have much to convey; it merely featured an image of a video game player sitting upright in a chair. Is he implying that he's now alert and attentive to something after a prolonged absence?
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