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GameStop stock has taken another twist, with the video game retailer's shares surging in recent days amid the return of Keith Gill, the trader who helped spark the 2021 meme stock frenzy.
Gill, better known by his online persona "Roaring Kitty," resurfaced on YouTube last week after a two-year hiatus, uploading a video titled "GameStop Earnings Video!!!" that analyzed the company's latest financial results. The move by the once-anonymous trader, whose massive bets on GameStop shares fueled the original Reddit-driven short squeeze, has reignited interest in the stock among his legions of fans.
"Roaring Kitty was the catalyst for everything that happened with GameStop in 2021, so his re-emergence is bound to catch people's attention," said Michael Pachter, managing director of equity research at Wedbush Securities. "He still commands a huge following, and his YouTube videos could drive more speculative trading."
GameStop shares have skyrocketed over 50% in the past week, trading back above the $25 level after spending much of 2022 mired in the teens. Trading volumes have also spiked, with over 28 million shares changing hands on Friday alone – more than quadruple the stock's average daily volume over the past three months.
"We're seeing a return of the meme mania, driven by the nostalgic appeal of the original GameStop saga," said Danielle Brian, chief investment officer at QS Investors. "Roaring Kitty's videos are reminding people of those crazy January 2021 days when the stock just seemed to defy gravity."
In the past, Gill's relentless promotion of GameStop and unusually large position in the stock – at one point valued at over $50 million – made him a cult hero among the Reddit crowd. His latest video, posted ahead of GameStop's earnings report on March 16th, suggested the company's push into cryptocurrency and NFT markets could drive future growth.
"GameStop has a lot of cash on hand, zero debt, and a cult-like customer base," Gill stated in the video. "It's positioned nicely if leadership can start executing and stop wasting money on overpriced acquisitions."
Not everyone is convinced the rally will last. Analysts at Bank of America reiterated their "underperform" rating on GameStop last week, arguing that renewed interest won't change the company's challenged business model in an industry shifting towards digital downloads.
"We expect the recent euphoria to be short-lived," the BofA analysts wrote. "GameStop remains heavily shorted for good reason, and the fundamentals have not changed."
Still, the recent price surge shows the remarkable ability of the "ape army" on Reddit to move GameStop's stock through sheer force of will. With their champion back in the trenches, more fireworks could be in store for one of the market's most controversial names.
