FMP
GameStop Soars on "Roaring Kitty"s Return and $116 Million Bet
Jun 4, 2024 7:47 AM - Parth Sanghvi
Image credit: Clay Banks
GameStop (GME) shares experienced a significant surge on Monday, closing 21% higher at $28. This jump follows the return of popular retail investor Keith Gill, known online as "Roaring Kitty," to Reddit.
Fueling the Fire:
- A Reddit post by Gill revealed a hefty $116 million bet on GameStop, translating to roughly 5 million shares or 1.8% of the company's publicly available stock.
- This significant investment fueled a buying frenzy, with GameStop becoming the most heavily traded stock on the NYSE by the closing bell. The total trading volume reached a staggering $4.7 billion.
Memories of the 2021 Frenzy:
- Gill's post reignited memories of the 2021 retail trading frenzy, where his bullish GameStop bets and social media presence heavily influenced individual investors.
- Back then, his actions contributed to a surge in "meme stocks," companies with weak fundamentals that gained cult-like followings through social media hype.
Unverified Information and Open Questions:
- The authenticity of the screenshot displaying Gill's holdings remains unverified by Reuters.
- Attempts to reach Gill via Reddit and email for comment have been unsuccessful.
Looking Ahead:
The return of "Roaring Kitty" and his sizable investment in GameStop have sparked renewed interest in the embattled video game retailer. Whether this translates to long-term stability for the company or a short-term pump fueled by nostalgia remains to be seen.
Industry PE Ratio as a Valuation Tool
Other Blogs
Oct 31, 2023 8:03 AM - Parth Sanghvi
FCFF vs FCFE: What's the Difference?
Free cash flow to the firm (FCFF) and free cash flow to equity (FCFE) are two of the most important metrics used in financial modeling. Both metrics measure the amount of cash that is available to a company's shareholders and creditors, but there is a key difference between the two. FCFF measures...
Nov 25, 2023 6:39 AM - Parth Sanghvi
DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method
Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...
Dec 23, 2023 2:19 AM - Parth Sanghvi
Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges
Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...
