Meme Stock Madness Strikes Again As GameStop Miraculously Cheats Death --- Will It Last?

Well, just when you thought the meme-stock era had finally thrown in the towel, GameStop decided to hit us with a plot twist worthy of The Sixth Sense. The OG meme stock—Wall Street Bets’ favorite underdog—posted third-quarter earnings that didn’t make investors immediately start shopping for ramen in bulk. Net sales came in at $860.3 million, and adjusted earnings hit $0.06 per share. Oh, and the stock jumped more than 10% in after-hours trading because, well, GameStop gonna GameStop.

(Source: Giphy) 

Buuut, before you start making diamond hands your entire personality again, this isn’t exactly a fairytale ending. Sales were down 20% from the same quarter last year, when GameStop raked in $1.08 billion. Still, turning a surprise $17.4 million profit is like finding a rare holographic Charizard in your childhood binder—it’s not going to solve all your problems, but it sure feels good in the moment.

(Source: Barrons) 

On the other hand, what made this earnings even more interesting is that Roaring Kitty himself, came back from the dead via twitter. The 2021 meme-stock messiah decided to grace X with cryptic posts that sent GME stock soaring 14% overnight. Honestly, the best way I can explain this phenomenon is like getting that adrenaline rushing “You up?” text from your ex just when you’re starting to move on. Naturally, retail traders lost their minds, proving once again that the meme-stock movement isn’t dead—it’s just lurking in the shadows, waiting for any excuse to “F ish up”. 

Tom Bruni, Stocktwits’ head of market research, summed it up: “Retail has stuck around. We’re seeing record levels of options activity, record trading activity, and even Robinhood adding betting markets.” Translation: Betting on stocks is now the millennial version of sports gambling, and Wall Street is desperately trying to figure out how to monetize the chaos.

(Source: Market Watch) 

Now going a bit deeper in the numbers here, GameStop’s $860.3 million in revenue missed Wall Street’s already lowball estimate of $888 million. But hey, a profit is a profit, especially when analysts were bracing for a loss. Naturally, in classic GameStop fashion, the company didn’t bother hosting a conference call to explain itself. Why would they? They’re GameStop. They don’t owe anyone answers. Especially since GME stock is up 54% in 2024, its best year since the meme-stock explosion of 2021, when it skyrocketed a mind-boggling 688%. Of course, most of this year’s gains came after Keith Gill’s social media resurgence in May and June. Coincidence? Hell no.

However, outside of a stock price that screams “manipulation”, Gamestop’s core business is basically a glorified sh*t show. Sales of video game hardware and collectibles are floundering, and the competition from Amazon and eBay is brutal. Consumers aren’t exactly eager to splurge on Funko Pops with inflation still giving Powell a run for his money. In fact, Wedbush analyst Michael Pachter told us all how he really felt about the situation, calling GameStop’s turnaround “insurmountable” and its investors “willingly foolish.” Oof.

(Source: Giphy) 

I mean sure, CEO Ryan Cohen is leaning into cost-cutting, closing underperforming stores, and focusing on “value-added” items. Translation: They’re desperately trying to make fetch happen. And yes, they raised $3 billion earlier this year from stock sales—but, GameStop is still a meme stock at heart.  Its success isn’t about fundamentals; it’s about vibes. The stock is a playground for retail traders, where cryptic tweets from Roaring Kitty and Reddit-fueled hype still move the needle. Now with that said, at least GameStop has $4.58 billion in cash to keep the lights on while the rest of its business struggles to level up.

In the end, GameStop’s Q3 profit is a nice win, but again, let’s not trick ourselves into thinking this is the start of a trend. The company is still a long way from a genuine turnaround, and the fundamentals are shaky at best. On the other hand though, as long as the meme-stock army is alive and kicking, GME will keep finding ways to stay in the game—whether Wall Street likes it or not.

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(Source: Giphy) 

So yeah, obviously filter this through a brain-cell you degenerates, and in the meantime, stay safe and stay frosty, friends! Until next time…

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Stocks.News does not hold positions in companies mentioned in the article.