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Meme Sector Experiencing Sharp Sell-off as GameStop Losses Continue

Jun. 11, 2024.
1 min. read. Interactions

GameStop's stock plummeted 62% to $24.89, sparking a downturn in meme tokens, with a Solana-based parody token dropping 25% and others also declining.

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Meme tokens are seeing a significant decline as GameStop’s losses extend to 60%. A Solana-based parody token dropped 25% in the last 24 hours, with other meme tokens following suit.

The controversial GameStop (GME) stock rally faced its second consecutive day of reversal on Monday, closing the U.S. trading session down 12% after a 40% drop on Friday. This downward trend has negatively impacted meme tokens that often mirror GameStop’s movements. GME ended Monday at $24.89, down 62% from a two-year high of $61 last Thursday.

Elsewhere, the Solana-based meme token GME, which parodies the company, slid 25%, reversing a more than 200% rally from the past week. Related tokens like Roaring Kitty (KITTY) and other cat-themed tokens, which previously moved alongside GME stock, lost an average of at least 10%, according to data tracked by CoinGecko.

Dog-themed tokens, including Dogecoin (DOGE), Shiba Inu (SHIB), and Floki (FLOKI), also experienced declines, with losses ranging from 4% to 10%. The stock had been volatile since late May, spurred by the return of retail trader and GME bull Keith Gill. Known by his aliases @TheRoaringKitty and “DeepF*ckingValue,” Gill was a pivotal figure in the stock’s short squeeze rally in 2021.

Last week, Gill showcased a $580 million position in GME equity and options holdings, boosting the stock’s prices and potentially setting him up for a billion-dollar exposure. However, gains were short-lived after GameStop announced plans to sell up to 75 million shares, just days after raising $933 million by selling 45 million shares. The company also reported a drop in quarterly sales, further dampening investor sentiment.

The impact on meme tokens was immediate and severe. “The drop in GME stock directly influences these meme tokens due to their correlation,” said a market analyst. “Investors should brace for more volatility as the situation unfolds.”

SOURCE: Meme Sector Sees Sharp Sell-off as GameStop Losses Extend to 60%

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