GameStop Stock (NYSE: GME): This Game is Rigged Against You.

Okay, here we go again. The rigged game of meme-stock trading appears to be back in style. GameStop (NYSE:GME) stock traders deserve praise, or possibly blame, for this. I won't win any popularity contests for this, but I am negative on GME stock and believe this craze phase will finish horribly, just as it did after the 2021 hype cycle (see chart below).

If anyone still cares, GameStop offers physical and, to a lesser extent, digital versions of video games. In general, today's gamers choose to download or stream video games rather than purchase them from GameStop.

The issue is that financial traders have notoriously short attention spans, but you don't have to fall into this trap. I strongly hope you receive this message before investing your hard-earned money in GameStop stock, only to come to regret it later on.
GameStop's Unusual Reason for the Rally

As I'll explain in a few moments, Wall Street analysts rarely cover GameStop. That's because experienced investors don't take the company seriously. However, GameStop stock - not the company - received a lot of attention in 2021. Fast forward to May 13, 2024, and the original meme stock from the 2020s has resurfaced.

As reported by TipRanks contributor Shrilekha Pethe, Bloomberg, and others, GME stock unexpectedly surged higher on Monday, nearly doubling in price at roughly 10:00 a.m. Eastern time. Thanks to Pethe's reporting, I soon discovered that there were no company-related triggers on May 13, such as an earnings release or an announcement from GameStop CEO Ryan Cohen.

Instead, the incident that piqued meme-stock speculators' interest was a post from "Roaring Kitty," or @TheRoaringKitty, on social media platform X. Previously a prominent Reddit user and meme-stock guru, "Roaring Kitty" posted on X on Monday, his first X or Reddit post since the peak of stock-market speculation in 2021.

Judging from his X posting, it looks like “Roaring Kitty” didn’t have much to say, as the post was just an image of a video game player sitting in an upright position in a chair. Is he suggesting that he’s now sitting up and paying attention to something after a lengthy absence?

For what it’s worth, there’s no denying that “Roaring Kitty” has some clout in the online trading community. Judging by Monday’s stunning surge in GME stock, it’s clear that meme-stock traders haven’t lost their sense of FOMO (fear of missing out) and YOLO (you only live once).