GameStop (NYSE:GME) has successfully raised nearly $2.14 billion, leveraging the recent surge in its stock price driven by the online reemergence of influential retail trader Keith Gill.
The video game retailer announced on Tuesday that it had completed the sale of 75 million shares. This offering was made public last Friday, just hours before Gill, known online as “Roaring Kitty” and “Deep F***ing Value,” returned to YouTube after a three-year hiatus.
On Wednesday, GameStop’s heavily shorted stock climbed 8%.
Over the past month, the stock has experienced significant volatility, influenced by Gill’s return to social media. Gill, whose bullish posts and videos contributed to the meme stock frenzy of 2021, has once again drawn attention to GameStop.
However, the current enthusiasm from retail traders does not match the fervor seen three years ago, according to inflow data tracked by Vanda Research. Last Monday, GameStop stock saw $18 million in purchases following Gill’s post showing a significant position in the stock. In contrast, the stock’s peak inflow reached $87.5 million on January 27, 2021.
“I still think that it’ll be hard to draw as large a crowd as in 2021. These flows are likely coming from a small subset of loyalists,” said Marco Iachini, senior vice president at Vanda Research, to Yahoo Finance on Monday.
On Wednesday, Citron Research, led by founder Andrew Left, announced it is no longer shorting GameStop. Last week, it was revealed that the veteran short seller held a position in the stock.
“It’s not because we believe in a turnaround for the company fundamentals will ever happen, but with $4 billion in the bank, they have enough runway to appease their cult-like shareholders,” Citron’s post on X stated.
Three years ago, Citron was forced to cover its short position in GameStop at a loss as retail traders bought up the stock.
Citron is no longer short $GME. It’s not because we believe in a turnaround for the company fundamentals will ever happen, but with $4 billion in the bank, they have enough runway to appease their cult like shareholders. Despite Wedbush setting an $11 target today, we respect the…
— Citron Research (@CitronResearch) June 12, 2024
Shorting involves borrowing shares for a fee in order to sell them, hoping to buy them back at a lower price to profit from the difference.
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