GameStop's Memecoin Drops by 50% In 48 Hours
Michael Pachter, a GameStop analyst at Wedbush, says he sees no potential for a meaningful turnaround
June 11, 2024 05:00 AM
Reading time: 1 minute, 41 seconds
TL;DR GameStop's wild ride continues. The meme coin has crashed by 25%, and trading volumes have plummeted. Keith Gill, aka Roaring Kitty, has seen $350 million in profits evaporate as GME shares drop by 50% in the last two days.
GameStop's wild ride has taken another sharp turn. The memecoin associated with the company has crashed by 25%, with trading volumes plummeting by an additional 47%. This downturn comes amid a broader decline in GameStop's stock price, which has seen a dramatic 50% drop in just two days.
Roaring Kitty's Losses
Keith Gill, also known as Roaring Kitty, became popular during the initial GameStop frenzy. He has reportedly seen his $350 million in profits wiped out. Last Thursday, Gill enjoyed a hefty $382 million profit from his GME options.
However, his position had taken a significant hit by Friday, losing over $235 million. The decline continued on Monday, with GME slipping another 12% after dropping 40% just before the weekend.
The sharp decline in GME stock has wiped out nearly all of Gill's recent gains. In just four days, his profits have evaporated, resulting in a loss of approximately $351 million over the past week.
Market Reactions
Michael Pachter, a GameStop analyst at Wedbush, expressed skepticism about the company's potential for a meaningful turnaround. He pointed out that multiple failed strategies have plagued GameStop in the past. Pachter also suggested that any boost from Keith Gill's involvement could be short-lived.
"We suspect that [Friday's] live stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough for the company to complete its [at-the-market share offering], but with no clear strategy, we suspect the share price will once again begin to descend," Pachter said.
Memecoin Frenzy
The memecoin GameStop ($GME) experienced a massive rally during the GameStop frenzy. The coin, which has no direct connection to the GameStop firm, soared by nearly 5000% since the beginning of June.
However, as excitement fizzled out, the $GME memecoin dropped by 25% in the last 24 hours. It is currently trading at $0.01596 with a market cap of $109 million. Besides, the daily trading volume has also dropped by 47% to $116 million.
The rapid rise and fall of GameStop's stock and its associated memecoins highlight the market's volatility and unpredictability. Investors are advised to exercise caution and remain informed about the risks involved.
