GameStop (GME) raised nearly $2.14 billion by capitalizing on recent price increases sparked by the online comeback of influential retailer Keith Gill.
The video game retailer said Tuesday that it had completed the sale of 75 million shares. The offering was announced last Friday, hours before Gill, who is known by his online pseudonyms “Roaring Kitty” and “Deep F***ing Value,” went live on YouTube for the first time in three years.
On Wednesday, the heavily shorted stock rose 8 percent.
The stock has been on a rollercoaster ride over the past month as Gill, known for his optimistic videos and posts that contributed to the meme hype of 2021, resurfaced across social media platforms.
Retailers’ enthusiasm for GameStop was not as great this time as it was three years ago, according to inflow data collected by Vanda Research.
GameStop shares attracted $18 million worth of buying last Monday as the stock soared following a post by Gill showing a massive position in the stock. For comparison, the stock’s highest inflow reached $87.5 million on January 27, 2021.
“I still think it will be difficult to attract as many people as we did in 2021. These inflows are likely to come from a small group of loyalists,” Marco Iachini, senior vice president at Vanda Research, told Yahoo Finance on Monday.
On Wednesday, Citron Research, led by founder Andrew Left, announced that it no longer holds short seller positions in GameStop after it was revealed last week that the veteran short seller held a position in the stock.
“This is not because we believe the company’s fundamentals will ever turn around, but with $4 billion in the bank, they have plenty of room to keep their cult-like shareholders happy,” Citron’s post on X reads.
Three years ago, Citron was forced to sell his short position in GameStop at a loss as an army of retail traders bought the shares.
Citron is no longer in short supply $GME. That’s not because we believe there will ever be a turnaround in the company’s fundamentals, but with $4 billion in the bank, they have enough room to keep their cult-like shareholders happy. Although Wedbush set a price target of $11 today, we respect the…
— Citron Research (@CitronResearch) June 12, 2024
When shorting, you borrow shares for a fee in order to then sell them on the market and buy them back at a profit when the price falls.
Short interests in GameStop currently stand at almost 22% of the free float.
“We believe institutional high-frequency traders are driving retail efforts, and performance data shows that this is not actually turning into a widespread bullish phenomenon for the meme stock cohort,” Iachini wrote.
The revival of the meme hype began last month when GameStop rose 180% within two days of Roaring Kitty posted for the first time on X, formerly known as Twitter, since 2021.
Meme competitor AMC (AMC) has also been volatile and also raised capital by selling shares last month.
On Wednesday, the cinema operator’s share price stagnated.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.