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Déjà vu

Roaring Kitty is posting again and GameStop is surging again

5/13/24 8:18AM

There’s something unusual going on in shares of GameStop right meow.

On Sunday evening, Keith Gill, aka The Roaring Kitty aka DeepFuckingValue, tweeted an image of someone leaning forward in their chair.

pic.twitter.com/YgjVqtgcNS
— Roaring Kitty (@TheRoaringKitty) May 13, 2024

What are we supposed to be paying attention to? Well, this:

GAMESTOP SHARES HIT $25 IN PRE MARKET $GME #GME #GAMESTOP pic.twitter.com/MP3BkWYRVN
— WhiteRabbit741 🏴‍☠️ (@madiguz7) May 13, 2024

Gill was the guru of the GameStop moment that saw shares of the beleaguered video game retailer rise almost 800% over the span of just five days in January 2021, while a hedge fund that bet against the company lost 53% during the month.

For years, he was a fixture on social media. On YouTube (as The Roaring Kitty), he explained the fundamental arguments for his long positions in GameStop, first initiated in June 2019. In the r/wallstreetbets subreddit (as u/DeepFuckingValue), he provided monthly updates of his positioning along with more color commentary. Gill had done the due diligence (or ‘DD’ in wallstreetbets parlance) that others were happy to use as the intellectual justification for their own frenzied buying of GameStop shares and call options as the stock began to rise.

As Gill would later say in testimony before Congress, “I like the stock.”

Last week, Gill also “liked” a post on X, formerly Twitter, from the movie “Run Lola Run”, which has been interpreted on some message boards as blessing the idea that GameStop shares have room to run to the upside.

So far, this is a faint echo of the 2021 (and even 2022) levels of price action and activity in GameStop.

What’s the same as 2021? Shares of GameStop are surging, and it doesn’t have much to do with any perceived positive change in the company’s operations.

(Based on the price action, it’s clear that Gill’s return to social media, even without saying a word, has people feeling better about the stock’s prospects, if not the company’s).

What’s different? As of the end of April, GameStop has more short interest as a percent of equity float (24%) than most stocks – but it’s a far cry from the more than 100% of shares sold short entering 2021, before the stock went parabolic.

In other words, there’s less potential buying power from people who have to admit they were wrong and close up bets against the stock if it goes up this time.

GameStop reports earnings on June 7.

J. Edward Moreno1h

Moderna soars after STAT reports “a buyout or a large partnership” are on the table

Moderna rose nearly 15% on Thursday after STAT reported that the company has flirted with the idea of tying up with a larger drugmaker.

The Covid vaccine-maker has talked to at least one large drugmaker on a deal "of significant scope" that could either be "a buyout or a large partnership," a source told STAT.

How Moderna, the company that helped save the world, unraveled

Luke Kawa3h

OpenAI appears to be definitively answering its doubters’ biggest question

The AI boom is power constrained. It’s chip constrained.

But it will not be capital constrained.

That’s the top takeaway from media reports from The Wall Street Journal and Reuters that OpenAI is plotting an IPO.

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”

And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

OpenAI has started work on an IPO that could value the company at $1 trillion

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

Max Knoblauch4h

Bearish options flow sends Lucid lower

Shares of luxury EV maker Lucid are being dragged down by bearish options trading on Thursday morning, with a put/call ratio of 5.8 as of 11:10 a.m. ET, versus the 1.05 it’s averaged over the prior 20 days.

If sustained, this would be the most bearishly tilted options activity for a single session for Lucid since June 21, 2024.

More than 32,000 put options have changed hands as of 11:10 a.m. ET, already above Lucid’s 30,794 20-day average for a full session. Lucid shares were down about 3% on Thursday morning.

On Wednesday, Lucid and Uber announced that their planned 20,000-robotaxi fleet would begin operations in the autonomously crowded streets of San Francisco starting next year. Earlier this week, Lucid also said it’s partnering with Nvidia to build autonomous vehicles for personal use.

Luke Kawa4h

Boeing slumps as Trump-Xi meeting produces no purchase announcements, Deutsche Bank downgrades to “hold” from “buy”

Blackwell chips weren’t the only thing that US President Donald Trump and Chinese President Xi Jinping didn’t talk about that was supposed to be on the agenda.

Andrew Bishop, global head of policy research at Signum Global Advisors, flagged that “multiple previously-mentioned items were seemingly left out of the deal,” including purchases of Boeing aircraft by China.

Shares of Boeing are selling off amid the lack of a purchase agreement for the American company’s planes in the one-year deal and a downgrade by Deutsche Bank. Analyst Scott Deuschle lowered the stock to “hold” from “buy,” cutting his free cash flow estimates and writing that the company remains “constrained by the burdens of the past.” He also reduced his price target to $240 from $255.

The plane maker recently reported quarterly results, in which it booked its first quarter of positive free cash flow since its door plug blowout in January 2024.

Luke Kawa5h

Core Scientific shareholders vote against acquisition by CoreWeave

CoreWeave’s latest attempt to purchase Core Scientific has failed.

Core Scientific announced that at its special meeting held earlier today, “the Company did not receive the requisite number of votes to approve the previously announced merger agreement with CoreWeave.”

This outcome was expected by markets, given that Core Scientific’s share price was trading well in excess of the deal price heading into this meeting, and major shareholders and proxy advisory firms had voiced their opposition to the tie-up.

Shares of Core Scientific initially popped on this news before quickly erasing all of that advance (and then some), while CoreWeave retreated deeper into the red.

CoreWeave’s acquisition would have represented meaningful vertical integration for the neocloud, providing it with ownership over existing data centers and a pipeline of more to come.

CoreWeave and Core Scientific still have an ongoing business relationship, however: the latter is the former’s landlord, and CoreWeave remains on the hook for $10 billion in overhead over the next 12 years that would have been eliminated by this deal.

"We respect the views of Core Scientific stockholders and look forward to continuing our commercial partnership,” said CoreWeave co-founder, Chairman, and CEO Michael Intrator in a press release. “CoreWeave’s strategy remains unchanged. We will continue to execute with discipline against our roadmap to create long-term shareholder value, including through opportunistic and strategic M&A.”