Roaring Kitty Returns to X: GameStop and Other Meme Stocks Get a Lift

Investors in meme stocks had reason to celebrate on Friday as Keith Gill, also known as “Roaring Kitty,” made a comeback on X. Gill, who became a figurehead of the meme stock craze earlier this year, posted on the platform for the first time since June, causing shares of GameStop and other meme stocks to surge.

The Impact of Roaring Kitty’s Return

Following Roaring Kitty’s post, shares of GameStop experienced a significant jump. Although the gains were later pared, the stock remained up about 6% by late Friday afternoon. The cryptic nature of Gill’s post led some to speculate that he might be returning to investing in GameStop, the video game retailer that became the epicenter of the meme stock phenomenon.

However, it’s worth noting that Gill’s post was an edited still from the movie “Toy Story 2.” Some investors interpreted this as a signal that Gill was dropping his investment in online pet retailer Chewy, in which he owned more than 6% of in early July, and potentially shifting his focus back to GameStop. As a result, Chewy shares initially fell about 3% before recovering. Additionally, shares of AMC Entertainment Holdings, another popular meme stock, also saw an increase in value.

GameStop’s Upcoming Earnings Report

The resurgence of interest in GameStop comes just days before the company is set to release its second-quarter financial report. Analysts predict that the report will show a year-over-year decline in revenue and a wider net loss for the company.

Wedbush analysts expressed skepticism about GameStop’s future, highlighting the challenges the company faces in its planned return to growth. They cited the gaming industry’s shift toward digital sales and subscriptions, as well as GameStop’s lack of a strategy to enter new categories with growth potential. As a result, Wedbush reiterated its “underperform” rating for the stock, arguing that its current valuation ignores the significant challenges ahead.

Despite these concerns, GameStop’s stock has experienced a 33% increase in value this year.

Conclusion

The return of Roaring Kitty to X has once again ignited the meme stock frenzy, with GameStop and other meme stocks experiencing a surge in value. However, analysts remain skeptical about GameStop’s long-term prospects, citing the company’s challenges and lack of a clear growth strategy. Investors will be eagerly awaiting the release of GameStop’s earnings report to gain further insights into the company’s financial performance and future outlook.

Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Please consult with a professional advisor before making any investment decisions.

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