Keith Gill triggered an unprecedented stock market storm in 2021. Now, better known by his pseudonym «Roaring Kitty», he is back – and history repeats itself.
Sometimes a simple image is enough to stimulate investors' imaginations. This is what happened these days. A photo circulated online showed a man leaning forward in his gaming chair.
It was clear to Gamestop's followers that Keith Gill, better known as «Roaring Kitty», was once again intensively involved with the video retailer. In online communities such as Reddit's Wallstreetbets, the la-ola wave was made.
Power of Retail Investors
Investors responded promptly: Gamestop's stock briefly soared by 110 percent to $37 before settling with a 70 percent gain. It currently stands at $27.67.
The massive surge can be primarily attributed to groups of retail investors who backed their memes with money. Aside from the «Roaring Kitty post,» there were no other catalysts for the surge.
Keith Gill rose to fame through his posts on WallStreetBets from 2019 to 2021, inspiring numerous retail investors. His story was immortalized in the 2023 movie «Dumb Money», in which he is portrayed by Paul Dano.
Balance Sheet Improvement Despite Volatility
Although Gamestop shares are still more than 70 percent below their peak in 2021, they remain significantly more attractive than in 2019 and 2020 when the price often fell below a dollar.
The recent surge helped Gamestop improve its financial position. The company now boasts $1.2 billion in liquid assets and $603 million in debt, compared to $587 million in liquid assets and $1.2 billion in debt at the end of 2020.
Sustainability Under Scrutiny
Despite generating $5.3 billion in revenue and a net profit of $17 million last year, the stock price remains roughly three times higher than a decade ago. Skeptics doubt the sustainability of this rise, while retail investors argue that a stock's value depends on what people are willing to pay.
