GameStop Stock Plummets 40% – Roaring Kitty's Meow Fails to Impress Wall Street
Last Friday, GameStop shares tanked nearly 40%, a drop so steep it made the 2021 meme stock craze feel like fond memories of a college fling. This nosedive coincided with Keith Gill, better known as “Roaring Kitty,” making his grand return to YouTube for his first livestream in three years. Spoiler alert: It was less “Avengers: Endgame” and more “Caddyshack II” in terms of impact.
Gill, whose online antics had previously made GameStop the underdog hero of Wall Street Bets, had his latest effort amount to a resounding thud. Despite over 600,000 starry-eyed viewers tuning into his pep talk, Gill’s livestream failed to ignite the same kind of investor fervor as before. The stock price briefly shot up nearly 50% when Gill teased his return, but reality, like gravity, eventually kicked in (source).
In his livestream, Gill provided a candid caveat: "You could lose it all," he warned, clarifying that his own overly aggressive investment style might not be the best life strategy for everyone else. Whether it was a statement resonating with refreshing honesty or a type of reverse psychology designed to lower expectations, it didn’t result in the anticipated investor stampede.
The catalyst for the downfall wasn't merely Roaring Kitty's tepid return. GameStop simultaneously announced a share sale to raise up to $3 billion (source), a move that investors responded to with all the enthusiasm of a toddler at a broccoli buffet. This latest share sale follows the company’s previous sale of 45 million shares last month, which netted them a cool $900 million. Clearly, the company is an adherent to the “if at first, you do succeed, but not hugely, try, try again” school of thought.
Just to keep investors on their toes, GameStop hastily reported its quarterly results four days ahead of schedule. Surprise! Or not. The results showed a decline in net sales from a year ago, making it a tad clearer where GameStop currently ranks on the financial health spectrum – somewhere around “anemic.”
Despite Gill’s expressed confidence in GameStop’s billionaire CEO Ryan Cohen, and Gill's past achievements of helping the stock rally by as much as 1,600%, his recent appeal wasn’t enough to stave off the grim reality. Further adding to the stocks’ woe, trading was halted several times ahead of and during Gill's livestream due to sheer chaos and volatility in the market (source).
Investors traded up to $10 billion worth of GameStop shares on that fateful Friday, a volume outdone only by heavyweights Nvidia and Apple. One can only imagine the delight on Wall Street, akin to watching a car crash in slow motion, for it seemed like everyone wanted a piece of the action – whether for profit, nostalgia, or simply the thrill of watching the stock market equivalent of a WWE match.
A domino effect rippled through the meme stock arena, with shares of other crowd darlings like AMC and Koss also tumbling. It’s as if meme stocks have taken a collective existential dip – perhaps having a midlife crisis now that the frenzy has worn off and reality has knocked at the door.
So, what now for GameStop? While the short-term looks as turbulent as a roller-coaster designed by M. C. Escher, the company’s long-term prospects remain a guessing game. Let's just say those still holding their shares likely have the same hopes pinned on Ryan Cohen's leadership as one does on horoscopes predicting sudden windfalls.
In conclusion, Keith Gill’s reemergence was unable to coat the stock in Teflon, the sudden share sale announcement left investors wary, and the disappointing fiscal results were simply the icing on this particularly bittersweet cake. It turns out, not every Roaring Kitty live stream can lead to purring profits.