The stock price of Gamestop sharply increases by 90%.
Reddit user "Roaring Kitty," whose real name is Keith Gill, recently made a comeback on the platform after a three-year absence. By sharing a simple screenshot of his portfolio boasting five million GameStop shares, he managed to trigger a significant rally in the stock.
Gill's return to the forum following a hiatus of three years was marked by a mysterious post last Sunday evening. He uploaded a snapshot of his portfolio, showing a substantial position in GameStop. And just like that, the stock price jumped by a whopping 90%, reaching around €39 by Monday morning. While sharing the photo, he also included a green reverse card from the popular card game Uno. This card is used to phase out a player's turn, adding to the excitement surrounding Gill's sudden re-emergence.
In the previous month, Gill had made a seemingly insignificant post on X's message board as "TheRoaringKitty," featuring a man in a red chair bent over. However, the seemingly harmless image had an unexpected impact, giving the trading community on X and Reddit a new lease of life. Gill is well-known by the alias "DeepFuckingValue" on Reddit, where he shares his investment insights publicly. He aims to inspire his online audience to invest in undervalued stocks with future growth potential.
The rise of meme stocks like GameStop, AMC, and Koss took a new turn in 2021 when internet users banded together to gamble against hedge funds betting on a drop in their prices. One such assembly was the "Wallstreetbets" subreddit, where Gill was actively posting under his pseudonym "DeepFuckingValue." His posts detailing his investment gains fueled a need among retail investors to get in on the action. The ensuing frenzy drove the GameStop stock to a staggering 400% growth in the final week of January 2021, nearly reaching its previous highs before declining again.
Despite recent corporate developments at GameStop, including a management change and upcoming cost-cutting measures, the hype-fueled rally was back on track. Gill's comeback on Reddit led to a massive surge in prices. GameStop led the charge with a 70% increase, sparking renewed interest in the stock. The AMC stock jumped by approximately 45%, while titles from headphone maker Koss saw a significant 23% rise. However, the prices fell considerably in later days and weeks.
As a fundamental investor, Gill has gained fame for advocating ownership in stocks with long-term growth potential. However, the GameStop case raises some questions. Despite the company facing management changes and pre-announced cost-cutting efforts, the stock's recent rally cannot be justified based on its fundamental performance. However, speculators still seem determined to keep their grip on the stock.
