GameStop gains as Roaring Kitty reveals bet in Reddit post

🌈 Abstract

The article discusses the recent surge in GameStop (GME) stock price, driven by the return of the influential stock trader known as "Roaring Kitty" to Reddit. The article covers the key details around Roaring Kitty's new $116 million bet on GameStop, the impact on the stock price and trading volume, as well as the reactions and perspectives from market analysts.

🙋 Q&A

[01] GameStop Stock Price Surge

1. What caused the recent surge in GameStop's stock price?

• The return of the influential stock trader known as "Roaring Kitty" to Reddit, where he posted a screenshot showing a $116 million bet on GameStop, triggered a surge in the stock price.
• Roaring Kitty's last post from April 2021 had shown a holding of 200,000 shares worth $30.9 million, and the latest post revealed an increased position of 5 million shares, or 1.8% of GameStop's publicly available stock.
• The value of Roaring Kitty's GameStop position jumped to $260 million, up $78.6 million from the previous session.

2. How did the stock price and trading volume react to Roaring Kitty's post?

• GameStop's stock price jumped 21% on Monday, closing at $28 after surging as much as 75% during the session.
• The trading volume was extremely high, with $4.7 billion worth of GameStop shares changing hands as of the market's close, making it the most heavily traded stock on the NYSE.

3. What is the current short position in GameStop?

• The short position in GameStop stood at 57.6 million shares, or 18.4% of the outstanding shares, compared to 162% in 2021 when the stock had its initial, eye-popping rally.
• The recent surge in the stock price put GameStop short sellers on track to rack up nearly $1 billion in paper losses.

[02] Analyst Perspectives

1. How do analysts view the impact of Roaring Kitty's return on the meme stock phenomenon?

• Ben Laidler, global markets strategist at eToro, said "Keith Gill is putting his money where his tweets are, and some investors are clearly following his lead and rekindling interest in meme stocks."
• Garrett DeSimone, head of quantitative research at OptionMetrics, said individual investors likely comprise a large part of the recent trading in GameStop, but the lack of a common enemy against Wall Street institutions could give some investors less reason to stay with their bullish bets this time around.
• Some analysts, such as Steve Sosnick, chief strategist at Interactive Brokers, questioned whether the original "Roaring Kitty", Keith Gill, was behind the recent posts, as he is no longer as "front and center" as he was during the initial GameStop frenzy.

2. How do analysts view the broader market implications of the meme stock resurgence?

• Peter Tuz, president of Chase Investment Counsel, said the renewed interest in meme stocks like GameStop could be a sign of "perhaps too much froth in markets" as major U.S. stock indexes have recently hit all-time highs.