With the celebrated resurgence of GameStop, the acclaimed video game retailer that took 2021 Wall Street by storm, the buzz around the financial landscape is palpable. At the heart of this is the 100% surge in the company’s share price, a spectacle that has created a torrent of discussions.
A key influencer attributed to this crescendo is the return of Keith Gill, better known as ‘Roaring Kitty’ in the annals of social media. Amidst a whirl of interest, Roaring Kitty has keenly resumed his online presence, giving life to a staggering enthusiasm among investors. This stormed resurgence has set off a second wave of the meme stock frenzy with GameStop sitting pretty at the center along with the burgeoning world of memecoins.
The meme stock fad gained phenomenal traction amongst the masses last year when investors with ample cash spontaneously boosted the stock market while betting against the short-selling hedge funds. At the forefront of this unanticipated volatility was none other than Keith Gill under the pseudonym “TheRoaringKitty.” His strategic play spilled onto the subreddit “WallStreetBets,” helping to amplify the value of stocks like GameStop and AMC Entertainment by an awe-inspiring 1000% by the end of 2021.
On the flip side, the freefall financially martyred several hedge funds, including Gabe Plotkin’s Melvin Capital Management, leaving them to nurse drastic losses that eventually led to their closure.
Data from Bloomberg shines a light on short sellers who initially savored substantial profits in the maiden four months of the year. Their joy, however, was short-lived due to the unpredictable temperament of meme stocks. Initially, skeptics enjoyed a windfall estimated around $400 million from January to April before this paper fortune crumbled into a financial ruin by the following Monday.
Fascinatingly the percentage of GameStop’s shares sold short, compared to those up for trade, lingered around 24%. This is a significant amount for the average company but pales in comparison to the staggering 140% seen during the 2021 frenzy. Betting against GameStop escalated in cost parallel with the company’s shares’ momentum—an estimation from S3 indicated borrowing cost surges surpassing a 10% annual financing fee range.
Roaring Kitty’s clout has far-reaching effects beyond GameStop, with more than 30 Wolverine-themed memecoins storming multiple blockchains in response to a social media post. One to watch, the Ethereum blockchain’s fresh ‘Roaring Wolverine’ token, witnessed a phenomenal 80% acceleration within hours of hitting the market.
The memecoin market itself has enjoyed a revival, with tokens like Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), Dogwifhat (WIF), Floki Inu (FLOKI), and Bonk Inu (BONK) showcasing significant upticks according to CoinGecko data. What’s more, PEPE took the lead with a 15% surge within 24 hours, perfectly complementing its 20% leap over the preceding week, which saw it reach an all-time high of $0.00001077 during early trading hours on Monday.
To summarize this significant development, the resurgence of GameStop’s meme stock, stoked by Roaring Kitty’s vigorous return, has unleashed a financial storm, leaving short-selling investors licking their wounds. The effect of this socio-financial quake has ricocheted to the memecoin market too, catalyzing a surge for several Wolverine-themed tokens.