GameStop’s meme stock surged again on Monday after a Reddit post from the meme-craze architect “Roaring Kitty”.
GME – Daily Chart
The price of GME surged at the open above $40 and slumped back to $28. The original gap open at that level supports the price. Traders can keep an eye on that level for the week ahead.
The struggling retailer surged 80% at the market open but fell back initially to a gain of 22%.
The move was driven by a Reddit post from Keith Gill, aka Roaring Kitty, who posted a bet on GME to $116 million. He also showed a large holding of options trades expiring in late June.
GameStop soared two weeks ago when Gill returned to the X social media platform for the first time in three years. The Reddit post was also the first in three years following his original analysis on YouTube and Reddit in 2021, which sparked a meme stock frenzy amongst retail investors.
Monday’s surge was also damaging for GME short sellers, who were on track to rack up almost $1 billion in paper losses, according to data from Ortex Technologies.
The $7 billion company needs help slowing sales in its core business of selling new and pre-owned video games. Video game sales have slowed over the last year, and consumers have also been downloading games digitally or streaming them more often.
GameStop is expected to release its first-quarter earnings results on June 11. Last month, the company said that first-quarter net sales would drop to $872 million and $892 million from $1.24 billion a year ago.
There could be more volatility ahead, and it is a stock to keep on watchlists as it could trigger another type of meme stock mania in a broader range of stocks.
News agencies could not verify Gill’s post, which may be the cause of the selling that emerged after today’s opening.
