GameStop (GME) raised nearly $2.14 billion by capitalizing on recent stock market rallies spurred by the online re-emergence of influential retail trader Keith Gill.
The video game retailer said Tuesday it completed the sale of 75 million shares, an offering announced last Friday hours before Gill, known by her online pseudonyms “Roaring Kitty” and “Deep F***ing Value,” was uploaded to YouTube for the first time in three years.
On Wednesday, the heavily shorted stock gained 8%.
The stock has been on a roller coaster ride over the past month as Gill, known for his bullish videos and posts that helped spur the meme frenzy of 2021, re-emerged on social media platforms.
This time around, the level of enthusiasm for GameStop from retail traders hasn’t matched that of three years ago, according to inflow data tracked by Vanda Research.
GameStop stock attracted $18 million in purchases last Monday as the stock surged following a release from Gill showing massive position on the stock. For comparison, the stock’s peak inflow reached $87.5 million on January 27, 2021.
“I still think it will be difficult to attract a crowd as large as in 2021. These flows are probably coming from a small subset of loyalists,” Marco Iachini, senior vice president of Vanda Research, said Monday. at Yahoo Finance.
On Wednesday, Citron Research, led by founder Andrew Left, announced it was no longer shorting GameStop after revealing the veteran short seller had a position in the stock last week.
“It’s not because we believe that a turnaround in the company’s fundamentals will ever happen, but with $4 billion in the bank, they have enough room to appease their shareholder cult,” we read in Citron’s message on X.
Three years ago, Citron was forced to sell its short position in GameStop at a loss as an army of retail traders bought the stock.
The lemon is no longer short $GME. This isn’t because we believe a turnaround in the company’s fundamentals will ever happen, but with $4 billion in the bank, they have plenty of room to appease their shareholder cult. Although Wedbush set a target of $11 today, we respect the…
– Citron Research (@CitronResearch) June 12, 2024
Shorting involves borrowing shares for a fee in order to sell them on the market and buying them back at a profit when the price falls.
Short interest in GameStop currently stands at almost 22% of the float.
“We believe that high-frequency institutional traders are at the forefront of retail trading efforts, and the performance data demonstrates that this is indeed not turning into a widespread bullish phenomenon for the meme stock cohort,” wrote Iachini.
The revival of the meme frenzy began last month, when GameStop rose 180% in two days after Roaring Kitty. posted for the first time on X, formerly Twitter, since 2021.
Same peer AMC (AMC) has also been volatile and this company also raised capital by selling shares last month.
On Wednesday, shares of the cinema operator were stable.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
