Ladies and gentlemen,
I’m getting deja vu. Anybody else?
- The massive meme stock, GameStop Corporation (NYSE: GME) is spiking again.
- Keith Gill and his Twitter handle, Roaring Kitty, are back in the news.
- Major brokers are crashing.
It’s like 2021 all over again, lol.
I’m excited!
GME spiked 2,700% in 2021. It was a massive short squeeze initially exposed by traders in online forums like Reddit.
There’s a chart of the move below, every candle represents one trading day:
Keith Gill is one of the most famous examples. He’s a trader that testified in front of congress to try and shed light on the whole situation.
In case you weren’t aware … our political pundits actually know very little about the world of finance and market movements. Besides the obvious profit positioning we see from officials like Nancy Pelosi …
The GME short squeeze caught everyone off guard. The investment management firm, Melvin Capital, was reportedly one of the big names shorting GME and lost millions as a result of the squeeze. That’s also why we saw brokers like Robinhood restrict GME shares during the height of the frenzy.
And now … it’s happening all over again.
The Newest Meme Spike
GameStop used to be a decent video game retailer that sold used games.
But, much like the digitization of the film industry (R.I.P. Blockbuster), video games moved online.
Now people use software services like Steam to access their favorite games. You don’t need the physical game disk to play it.
As a result, GameStop’s business was quickly declining in the late 2000-teens. And Wall Street took notice …
A lot of people don’t know this: Major wall street hedge funds also hold short positions. If you give a finance bro enough money and time on his hands, he’ll find a way to try and leach more money from the market.
Hedge funds can make money by betting that crappy stocks will continue to fall.
There were a lot of people betting on the downfall of GameStop. And eventually, internet sleuths like Keith Gill recognized the massive short interest. They started to build positions against it.
See … the hedge funds needed people to sell their shares. That’s what would drive the price of GameStop lower, then the short sellers would cash out. But … if nobody sold their shares … the chance of a short squeeze grew.
Reddit Warriors
This is where the term “diamond hands” came from. Traders who would hold massive amounts of GME stock for the sake of squeezing prices higher.
Keith Gill spread his trading thesis online, largely through Reddit and Twitter platforms. And on Sunday, May 12, 2024, Gill resurfaced online. His Twitter account hadn’t shown any activity since 2021.
I reposted his Tweet below, an image of a gamer beginning to take the game seriously:
Retweet if you love seeing @TheRoaringKitty tweet again for the first time in 3+ years, LFGGGGGGGG!!! We want #memestock mania again! $GME https://t.co/4Bylu9ZOcx
— Timothy Sykes (@timothysykes) May 13, 2024
As a direct result, GME spiked 110%* on Monday.
My students and I saw this play from a mile away! See my Tweet below:
Thank you @TheRoaringKitty for making $GME pop, look at alllll these great upcoming https://t.co/occ8wKmlgm students you've helped!
Garrett_Fuller: All out of $GME from $26.18-$34.90
Bazz: $GME played it twice. 1st: in at 23.09 out at 24.88 with 75 shares. win of $134.25. 2nd…
— Timothy Sykes (@timothysykes) May 13, 2024
And AMC Entertainment Holdings Inc. (NYSE: AMC) spiked 50% … AMC was another meme stock that squeezed in tandem with GME.
There are charts of both moves on Monday below, every candle represents one trading minute.
GME:
AMC:
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Wall Street Is Scared!
You might have noticed, traders using Etrade had a difficult time accessing their accounts yesterday morning …
It’s happening all over again!
When Morgan Stanley bought Etrade a few years ago, I warned people about sketchy market players. And now that Keith Gill is back online, Wall Street is quaking in their boots.
We can’t say for certain whether the Etrade difficulties were a malicious reaction to the GME spike … but it certainly is quite the coincidence …
Monday, May 13, 2024, marks the revival of an intense meme stock sector.
Keith Gill followed up his initial Tweet with a home video:
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
This is not the time to screw around!
The meme volatility is back. And small-account traders are in the perfect position to profit.
>> Join our trading live stream! <<
We’re covering the hottest plays, like GME and AMC, in real time! Traders get to watch these charts setup for solid trade opportunities while listening to the thought process behind professional millionaire traders.
If you missed the meme craze from a few years ago … Now is your time to capitalize.
Don’t waste this opportunity.
Cheers.
*Past performance does not indicate future results
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