• GameStop shares surged over 640% after Keith Gill’s return to social media.

• The GameStop-inspired memecoin spiked by 23.81%, outperforming major memecoins like Dogecoin and Shiba Inu.

GameStop (GME) shares have experienced significant volatility, skyrocketing over 640% following the return of retail investor Keith Gill, known as Roaring Kitty, on social media. This dramatic increase in share value contrasts sharply with the recent 0.58% decline, bringing the stock to $29.84. This fluctuation coincides with Citron Research’s announcement that it has closed its short position in GameStop stock.

In a post on June 12th, Citron Research explained their decision, citing the market’s “irrationality” and the “cult-like” behavior of GameStop shareholders. They stated,

Citron is no longer short $GME. It’s not because we believe in a turnaround for the company fundamentals will ever happen, but with $5 billion in the bank, they have enough runway to appease their cult-like shareholders.

GME Memecoin’s Unexpected Surge

GameStop’s stock experienced a notable jump of almost 23% on Tuesday, contributing to a doubling of its value over the past six months. The renewed interest in GameStop shares was significantly influenced by Keith Gill’s recent reappearance on YouTube, marking his first livestream in three years. 

The impact of his presence on the stock market continues to be substantial, reminiscent of the events in 2021 that initially brought the retailer into the spotlight of retail investors. This surge outpaced major memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB), which increased by 6% and 3.7%, respectively.

This phenomenon of social media-driven market movements has not been universally welcomed. In a CNBC interview, former SEC Chair Jay Clayton expressed concern, stating,

It bothers me on many levels. It’s a lot closer to gambling than trading, and it is certainly not investing.

In a recent announcement to the New York Stock Exchange, GameStop confirmed the sale of all 75 million shares offered to investors, successfully raising $2.137 billion. This follows the sale of 45 million shares last month, which garnered $933.4 million for the company. GameStop has raised over $3 billion through share sales in the last month, significantly boosting its market value.

The capital raised through these share sales is expected to provide GameStop with substantial financial flexibility, potentially aiding its ongoing efforts to pivot its business model and invest in growth opportunities.

Performance and Sentiment Analysis of GameStop Memecoin

Despite the price surge, Santiment data analysis shows that Dogecoin significantly overshadows GameStop’s memecoin in terms of social dominance. This disparity highlights the varying influence and reach of different memecoins in the market.

The overall sentiment around the GameStop-inspired memecoin remains mixed. The Relative Strength Index (RSI) is above the neutral line, indicating strong bullish momentum. However, if the memecoin drops below the $0.0157 support level, it could signal a bearish trend.

The unexpected rally in GameStop shares, largely orchestrated by retail investors, resulted in significant financial consequences for professional Wall Street firms that had bet against the retailer. This phenomenon, a short squeeze, forced these firms to cover their positions at substantial losses. The renewed interest in GameStop, driven by influencers like Gill, continues to highlight the influence of retail investors in the stock market.

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