GameStop Stock Soars After Roaring Kitty Post, But Soon Fizzles: Will Meme Stock Deliver on Earnings?

Meme stock darling GameStop has had a turbulent trading history ever since the massive run-up of its share price in January 2021. As the New York Post reported, at that time, GameStop stock surged 1,600% on the back of retail investors convinced that by buying and holding the stock, they could force hedge funds that had shorted GameStop to close their positions at a much higher price.

To some degree, it worked. Largely spurred by the efforts of influencer Keith Gill, aka “Roaring Kitty,” Melvin Capital lost 53% in January of 2021, per a separate New York Post report, though this loss was soon recovered by cash infusions coming from other investment firms.

According to Macrotrends, the stock reached an all-time high of 86.88 on Jan. 27, 2021 — however, it has tumbled steeply from those heights since then.

Roaring Kitty’s Latest Post Causes GameStop Stock Surge, Though Short-Lived

On Dec. 5, Gill’s latest post, made on his Roaring Kitty X account, caused a stock surge as retail investors bought back in. The post had attracted more than 9.4 million views and 64,000 likes by the afternoon of Dec. 6, despite its cryptic nature.

The post features a TIME Magazine mockup of an actual cover posted from 2006 advertising the birth of the information age. However, commenters were left scratching their heads in search of clues as to the post’s overall meaning.

Despite the mysterious nature of the post, Gill’s status as a flagbearer for meme stocks GameStop and AMC sent both companies’ share prices upward. In particular, as Barchart outlined, GameStop stock gained 6% following Gill’s post.

However, as Barron’s explained, that hype was short-lived: AMC stock tumbled below its gains on Dec. 6, while GameStop held a marginal dip (down 0.28% as of 1:15 p.m. ET, at $28.55), and failed to reach its intraday high of $30.87 achieved the day prior.

Analysts Skeptical Over GameStop’s Future: Earnings To Come Dec. 10

As Fortune reported, some analysts are extremely skeptical over GameStop’s current (and future) prospects.

In a note to investors, Michael Pachter of Wedbush expressed doubt as to whether the gaming and collectibles retailer was worth its current valuation.

“GameStop has roughly $10 per share in cash now, but with no clear strategy to reasonably deploy capital, we don’t believe shares should trade at 3x cash,” Pachter wrote. “The company’s planned return to growth faces insurmountable barriers.”

Barchart’s analysis was equally skeptical over GameStop’s immediate future. A significant decline in net sales, $798 million in Q2 as opposed to $1.16 billion in the same period last year, was one indicator. Coupled with an increase in operating expenses, as well as sales being forecast to dip 23% year-over-year in fiscal 2025 and a further 6.4% in 2026, the projections illustrate a potentially grim future for the retailer.

Regarding the Dec. 10 quarterly earnings report expected for GameStop, per Fortune, the company will not host a conference call or issue guidance. As Fortune pointed out, the company faces serious competitive disadvantages in the modern gaming marketplace, including a massive switchover of consumer preferences for digital products over physical discs, as well as the rise of subscription gaming services such as Xbox’s Game Pass.