Sensational Back To The Future For Gamestop

Mike Leslie
May 14, 2024

Keith Gill, better known as Roaring Kitty, posted the first message on his verified X social media account in three years on Monday.

Inputs that matter: Gill posted a meme of a man with a game controller leaning forward in his chair.

  • As a result, GameStop shares surged to $81.25 from $9 in a few hours.
  • Officials on the New York Stock Exchange halted the stock from trading on five separate occasions in early trading due to surging volatility.

The opportunity: Gill was instrumental in the meme stock frenzy three years ago.

  • Gill became a private investor after working for the Massachusetts Mutual Life Insurance Co., or MassMutual.
  • During the pandemic, he and other amateur investors banded together in Reddit groups like WallStreetBets to buy stocks of companies such as GameStop, AMC, and retailer Bed Bath & Beyond, much to the bafflement of professional investors on Wall Street.
  • Today, GameStop continues to move upward.

Zoom in: Those shorting GameStop (NYSE: GME) have lost $1.5 billion this month.

  • Between all meme stocks, short sellers have lost over $2 billion in 24 hours.
  • Meanwhile, AMC Entertainment (NYSE: AMC) is cashing in on the revival of the meme stock trade, raising $250 million by selling 72.5 million shares on Monday.

Between the lines: Earlier this year, U.S. District Judge Maxine Chesney declared that the social media firm Reddit owned the WallStreetBets channel.

  • WallStreetBets founder Jaime Rogozinski sued Reddit for infringing on his trademarks but lost the case.
  • Rogozinski, who founded the subreddit in 2012, sued Reddit last year after being ousted as moderator for trying to monetize the community by promoting his book and an esports competition, which is against the platform’s terms of service.
  • He alleged that he was terminated because of a trademark application he filed in 2020 to register WallStreetBets, which Reddit allegedly opposed as part of an effort to systematically assert ownership of popular subreddits to support its 2024 IPO.

Follow the money: Reddit (NYSE: RDDT) went public in 2024 with what CEO Steve Huffman has called a “vast corpus” of valuable data that can be used to train AI.

  • Google recently cut a deal with Reddit for a reported $60 million per year to provide real-time access to that data.
  • In 2021, Reddit’s first IPO attempt fizzled; three years later, it succeeded.
  • GameStop stock (NYSE: GME) rose nearly 100% Tuesday before paring gains, adding to a rally that sent shares of the video game retailer up 74% Monday.

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Read More

  1. https://kotaku.com/gamestop-gme-meme-stock-roaring-kitty-keith-gill-1851472682
  2. https://www.thestreet.com/investing/stocks/gamestop-shares-rocket-pounding-short-sellers-as-roaring-kitty-returns
  3. https://twitter.com/KobeissiLetter/status/1790025459717009630
  4. https://www.hollywoodreporter.com/business/business-news/wallstreetbets-trademark-fight-ends-in-win-for-reddit-1235791101/
  5. https://www.theverge.com/24097069/reddit-ipo-public-investment-ai-training-data-google
  6. https://twitter.com/CramerTracker/status/1790374225737347440
  7. https://finance.yahoo.com/news/gamestop-stock-gains-nearly-100-as-meme-stock-market-returns-with-a-vengeance-113640704.html
  8. https://www.marketwatch.com/story/amc-sold-250-million-of-stock-late-monday-after-meme-stock-rally-58d6b1a2