The strange pre-market surge in GameStop (GME) stock triggers a 3,914% spike in a Solana meme coin of the same name within 2 days.
The original GameStop stock, with ticker GME, is witnessing a surprising rally due to a post from Roaring Kitty. However, with the GME stock suspended for trading at the start of the uptrend, investors have trooped to crypto meme coins sharing similar names.
Notably, GameStop (GME), a Solana-based meme coin created in February as a parody of the original GameStop, has capitalized on this upsurge. Market data shows that the meme coin began yesterday with a price of $0.00049226 following three consecutive days of sustained losses.
However, its price soared to a three-month high of $0.0083548 before it saw a mild correction, closing Monday with a massive 1,576% increase. As the original GME sustained its rally into the after hours today, the Solana meme coin followed suit.
As a result, it spiked to a peak of $0.01976, marking a 3,914% increase in just two days. GME dropped from this high, but currently trades at $0.01635, maintaining a 222% rise in 24 hours and a 3,221% increase from its opening price yesterday. Volume has soared 350% in 24 hours to $218 million, with market cap hitting $112.5 million.
GameStop: What Happened?
GameStop Corp., a U.S.-based game retailer, saw its stock soar by unbelievable margins in the pre-market phase. GameStop shares, which ended Monday at $30.45, saw an impressive rally in the after hours following an X post from finance analyst and investor Keith Gill, commonly known as Roaring Kitty.
Gill had advocated for GameStop in 2021, triggering a similar surge in price, but went AWOL after that. The recent post, which has garnered 24.4 million impressions at last check, marked Gill’s first X post in nearly three years. It featured a widely recognized meme depicting a gamer leaning forward in a posture denoting heightened focus.
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
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Shortly after this post, Gill continued to share clips of movies, garnering investor attention. Amid the ruckus, GME, which has underperformed over the past few months, skyrocketed from its closing price of $30.45 to a pre-market high of $80 earlier today, marking a 162% increase.
Market watchers such as Neil Wilson, Finalto’s B2B Chief Market Analyst, interpret the surge as indicative of a renewed investor appetite, characterized by a willingness to embrace risk. Wilson underscores that the rally lacks fundamental justification, particularly given GameStop’s turbulence over the past year.
Bloomberg’s Joe Weisenthal noted on X that he has no explanation as to why GME shares jumped 75% yesterday. However, he thinks the surge today is because the market expects GameStop to raise capital and boost future cash flow significantly.
I have no explanation for why $GME shares soared 75% yesterday.
But I think this morning’s 115% rally is pretty clearly the market pricing in $GME‘s new ability to raise capital, and execute a strategy that will raise the net-present value of all future cash flows by 115%.
— Joe Weisenthal (@TheStalwart) May 14, 2024
Notably, the spike to $80 brought GameStop’s market cap beyond the $20 billion mark. In addition, short traders recorded significant losses, amounting to $1 billion yesterday alone.
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