GameStop Stock (NYSE:GME): This Game Is Rigged Against You

GameStop Stock (NYSE:GME): This Game Is Rigged Against You
Well, here we go again. The rigged game of meme-stock trading is back in vogue, evidently. GameStop (NYSE:GME) stock traders deserve the credit or, perhaps, the blame for this. I won’t win any popularity contests for this, but I am bearish on GME stock and expect this mania phase to end badly, just like it did after the 2021 hype cycle (see the chart below).
If anybody cares anymore, GameStop sells physical copies of video games and, to a lesser extent, digital copies of games. Generally speaking, today’s gamers directly download or stream their video games instead of purchasing them through GameStop.
The problem is that financial traders have notoriously short attention spans - but you don’t have to fall into that trap. I sincerely hope that this message reaches you before you commit your hard-earned capital to GameStop stock, only to probably end up regretting it later on.
GameStop: The Unusual Reason for the Rally
As I’ll describe in a few moments, Wall Street’s analysts barely cover GameStop (and the one Wedbush analyst covering GameStop definitely isn’t bullish). That’s because seasoned investors don’t take the company very seriously. However, GameStop stock - I mean the stock, not the company itself - garnered a lot of attention in 2021. Fast-forward to May 13, 2024, and the original meme stock of the 2020s is top-of-mind once again.
As covered by TipRanks contributor Shrilekha Pethe, as well as by Bloomberg and others, GME stock unexpectedly zoomed higher on Monday, even doubling in price at around 10:00 a.m. Eastern time. Thanks to Pethe’s reporting, I quickly learned that there weren’t any company-prompted catalysts on May 13, such as an earnings report or an announcement from GameStop’s CEO, Ryan Cohen.
Instead, the event that got meme-stock traders excited was a posting from “Roaring Kitty,” or @TheRoaringKitty, on social-media platform X. Previously a prolific Reddit user and meme-stock guru, “Roaring Kitty” posted on X on Monday, and this was his first X or Reddit posting since the height of stock-market speculative fervor in 2021.
Judging from his X posting, it looks like “Roaring Kitty” didn’t have much to say, as the post was just an image of a video game player sitting in an upright position in a chair. Is he suggesting that he’s now sitting up and paying attention to something after a lengthy absence?