GME Revolution: How Ryan Cohen and Roaring Kitty Sparked an Uprising

Mid-2020: GameStop's Struggles and Initial Interest (Ryan Cohen and Roaring Kitty)

By mid-2020, GameStop, a brick-and-mortar video game retailer, was struggling due to the industry's shift towards digital downloads and the impact of the COVID-19 pandemic on in-store sales. The company's stock price had plummeted, making it a target for short sellers who believed the stock would continue to decline. GameStop's declining fortunes attracted the attention of Keith Gill, an investor and financial analyst who posted under the pseudonyms Roaring Kitty on YouTube and DeepFuckingValue on Reddit.

Keith Gill aka Roaring Kitty (Ryan Cohen and Roaring Kitty)

Keith Gill began publicly discussing his bullish position on GameStop in mid-2020. He believed the market was undervaluing the company and saw significant potential for a turnaround. Gill's analysis was based on several factors:

• Valuation: He argued that GameStop's stock was undervalued compared to its assets and earnings potential.

• Short Interest: He noted that the stock had an unusually high short interest, meaning a large number of shares were being borrowed and sold by investors betting against the company. This created the potential for a short squeeze, where short sellers would be forced to buy back shares at higher prices, driving the price up further.

• Future Prospects: Gill believed in the long-term potential of GameStop, particularly if the company could pivot its business model to better compete in the digital age.
  

Ryan Cohen Enters the Scene (Ryan Cohen and Roaring Kitty)

In August 2020, Ryan Cohen, co-founder and former CEO of the successful online pet retailer Chewy, began acquiring a significant stake in GameStop. By December, he had purchased a 9% stake in the company, making him one of the largest shareholders. Cohen's involvement was a game-changer for several reasons:

• Successful Track Record: Cohen had a proven history of building Chewy into a major e-commerce player, which he sold to PetSmart in 2017 for $3.35 billion.

• Activist Investor: Cohen wasn't just a passive investor; he was known for taking an active role in shaping the strategic direction of companies he invested in. He pushed for changes to improve profitability and shareholder value.
  

In January 2021, Cohen joined GameStop's board of directors along with two former Chewy executives. This move was seen as a positive signal by many investors who believed Cohen could replicate his success at Chewy and transform GameStop into a modern, profitable company.

Social Media Hype and WallStreetBets (Ryan Cohen and Roaring Kitty)

The involvement of Ryan Cohen and the analysis by Keith Gill gained significant attention on social media, particularly on Reddit's WallStreetBets forum. WSB is known for its irreverent and aggressive investment strategies, often focusing on high-risk, high-reward trades. The community's enthusiasm for GameStop grew rapidly, fuelled by several factors:

• Short Squeeze Potential: The high short interest in GameStop shares made it an attractive target for a coordinated buying effort to trigger a short squeeze.

• Grassroots Movement: Many retail investors saw this as an opportunity to challenge institutional investors and hedge funds, which they believed were unfairly targeting GameStop for failure.

• Memes and Virality: The movement gained momentum as memes and success stories went viral, drawing more attention and participants to the cause.

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The Peak of the Saga (Ryan Cohen and Roaring Kitty)

In late January 2021, GameStop's stock price surged dramatically, rising from under $20 at the beginning of the month to an intraday high of over $480 on January 28. This unprecedented spike was driven by a combination of retail investor buying pressure, the short squeeze, and media coverage. The trading frenzy led to significant volatility, and several trading platforms, including Robinhood, temporarily restricted purchases of GameStop and other heavily shorted stocks, sparking further controversy and debate about market fairness.

Keith Gill's Faith in Ryan Cohen (Ryan Cohen and Roaring Kitty)

Keith Gill's confidence in GameStop was closely tied to his belief in Ryan Cohen's ability to lead a successful turnaround. Gill highlighted Cohen's strategic vision and operational expertise, which were demonstrated during his tenure at Chewy. Cohen's approach to transforming Chewy involved:

• Customer-Centric Model: Emphasizing excellent customer service and a robust online shopping experience.

• Strategic Investments: Investing in technology and logistics to streamline operations and improve efficiency.

• Long-Term Vision: Focusing on sustainable growth and building a loyal customer base.
  

Gill and many other investors believed that Cohen could apply similar strategies at GameStop, potentially pivoting the company towards e-commerce and leveraging its brand and customer base to compete in the digital gaming market.

Conclusion (Ryan Cohen and Roaring Kitty)

Ryan Cohen and Roaring Kitty show the GameStop saga of 2020-2021 is a multifaceted story involving market dynamics, social media influence, and corporate transformation. It showcased the power of retail investors, the impact of activist investing, and the potential for significant market disruptions. Ryan Cohen's entry into GameStop brought hope for a turnaround, leveraging his successful track record with Chewy. Meanwhile, Keith Gill's early and public endorsement of GameStop, combined with the viral enthusiasm of the WallStreetBets community, created a perfect storm that captured the world's attention and highlighted the evolving landscape of investing in the digital age.