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GameStop Stock Surges as Roaring Kitty Skewers Recent Losses – Decrypt
![GameStop Stock Surges as Roaring Kitty Skewers Recent Losses – Decrypt GameStop Stock Surges as Roaring Kitty Skewers Recent Losses – Decrypt](https://cdn.decrypt.co/resize/1024/height/512/wp-content/uploads/2024/01/gamestonks-gID_7.png)
Video game retailer GameStop saw a considerable rebound on Wednesday, closing up 22.8% after experiencing two consecutive days of significant losses. That followed last week’s spike amid the latest return of influencer Roaring Kitty (aka Keith Gill).
After a challenging start to the week, GameStop’s stock plummeted by more than 8% in early Tuesday trading. However, by the end of the day, it had surged, marking an impressive turnaround. This recovery can be attributed to several factors, including completing a major share offering and shifting market sentiment.
Meanwhile, Roaring Kitty continued to poke fun at himself and the ongoing developments, even as he lost around $350 million on his GME position from last Thursday through the close of business on Monday.
He shared a meme on Twitter on Tuesday that showed a character looking at an “Options Basics 101” course, apparently skewering himself over his own paper losses. Roaring Kitty has yet to share his latest disclosure of his portfolio, as of this writing, including the value of his options holdings—though he’s sure to see a sizable increase given the price jump.
Share offering impact
On Tuesday, GameStop announced the completion of its previously disclosed at-the-market (ATM) equity offering program. The company sold the maximum number of shares registered under the ATM program, generating approximately $2.137 billion in gross proceeds.
GameStop intends to use the net proceeds from this offering for general corporate purposes, which may include acquisitions and investments. This successful share offering significantly bolstered the company’s financial position, increasing its cash reserves to over $4 billion and contributing to the stock’s rapid recovery.
The surge in GameStop’s stock price has been met with a mixture of surprise and enthusiasm across social media and trading platforms. More than 136 million shares were traded on Tuesday as retail investors rode the stock’s revival, buoyed by the recent return of Roaring Kitty after he accumulated sizable GME options.
Moreover, analysts from S3 Partners have noted a significant amount of short squeeze activity, which has likely fueled the rapid price increase. This phenomenon occurs when investors who have bet against the stock are forced to buy shares to cover their positions, driving the price up further.
Broader market trends also likely played a role in GameStop’s stock movements.
Wall Street traded relatively flat as investors exercised caution in anticipation of the upcoming inflation report and Wednesday’s Federal Open Market Committee (FOMC) meeting.
The S&P 500 was down about 0.2%, experiencing its poorest daily performance so far this month. However, the tech-centric Nasdaq 100 remained stable, supported by a robust surge in Apple following Monday’s reveal of its new AI offerings.
Edited by Andrew Hayward
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.