The return of “Roaring Kitty” sparked a jaw-dropping advance in GameStop shares Monday, but such a speculative rally in an unprofitable company will likely end badly once again. Roaring Kitty, the man who inspired the meme stock mania of 2021, resurfaced online with a cryptic image showing a man in a chair leaning forward. That was enough to spark a buying frenzy among amateur traders. Shares of GameStop surged as much as 110% higher with a slew of trading halts for volatility. However, from a fundamental standpoint, the brick-and-mortar video game company isn’t deserving of such a pop in the stock price. In late March, GameStop said it cut an unspecified number of jobs to reduce costs and reported lower fourth-quarter revenue amid rising competition from e-commerce-based competitors. “I don’t know of anything fundamental that would drive the stock this high,” Michael Pachter, Wedbush analyst covering GameStop, told CNBC. “They are not in a position to be profitable.” “They made $6 million last year and burned cash,” Pachter said. “We expect them to lose $100 million a year going forward. It’s a race to see if they can close sto …
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[mwai_chat context=”Let’s have a discussion about this article:nnThe return of “Roaring Kitty” sparked a jaw-dropping advance in GameStop shares Monday, but such a speculative rally in an unprofitable company will likely end badly once again. Roaring Kitty, the man who inspired the meme stock mania of 2021, resurfaced online with a cryptic image showing a man in a chair leaning forward. That was enough to spark a buying frenzy among amateur traders. Shares of GameStop surged as much as 110% higher with a slew of trading halts for volatility. However, from a fundamental standpoint, the brick-and-mortar video game company isn’t deserving of such a pop in the stock price. In late March, GameStop said it cut an unspecified number of jobs to reduce costs and reported lower fourth-quarter revenue amid rising competition from e-commerce-based competitors. “I don’t know of anything fundamental that would drive the stock this high,” Michael Pachter, Wedbush analyst covering GameStop, told CNBC. “They are not in a position to be profitable.” “They made $6 million last year and burned cash,” Pachter said. “We expect them to lose $100 million a year going forward. It’s a race to see if they can close sto …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
