Unity Software (U) experienced a significant surge in its stock price, rising nearly 10% on Thursday, following a cryptic X post by Keith Gill, known as “Roaring Kitty.” This post, which featured a clip of the late musician Rick James and his song “Unity,” seemed to ignite a spark in the trading community, reminiscent of the meme stock frenzy Gill instigated in 2021 with GameStop (GME).
Despite a challenging 2024 where Unity’s shares dropped by about 35%, largely due to backlash from introducing and then retracting a “runtime fee” pricing policy, the company’s market valuation is poised to increase by over $700 million if the day’s gains are sustained. On this first trading day of 2025, Unity’s shares reached as high as $26.08, signaling a robust recovery in investor sentiment, at least for the moment.
Unity, the maker of the widely-used Unity Engine, serves millions of game creators monthly, including those behind popular games like “Pokemon Go,” “Beat Saber,” and “Hearthstone.” The platform’s significance in the gaming industry underscores the potential impact of social media influencers like Gill on market dynamics.
Art Hogan, chief market strategist at B. Riley Wealth, commented to Reuters that the response from the meme stock community to such social cues on platforms like Reddit or X is predictable, highlighting the influence Gill still wields. However, this enthusiasm comes in the wake of Unity’s strategic restructuring, including layoffs of about 25% of its workforce last year after an 8% reduction in 2023, aimed at improving profitability.
Gill’s recent activity in the stock market has been mixed; his disclosed stake in Chewy was dissolved last year, and his June 2024 livestream failed to rekindle the magic with GameStop, leading to a drop in its stock price. This history raises questions about the sustainability of such meme-driven stock movements. Thomas Hayes from Great Hill Capital LLC expressed skepticism, suggesting that such speculative plays often end poorly for investors, cautioning against treating investing like a game.
The resurgence of interest in Unity’s stock underscores the volatile nature of meme stocks, where social media influencers can significantly sway investor behavior, sometimes overshadowing the underlying business fundamentals. While Unity benefits from this immediate boost, the long-term effects on its stock price and the company’s strategic direction remain to be seen, especially as it navigates through recovery from its pricing debacle and workforce adjustments.
Price Action: Unity Software shares are currently trading at $23.76, up $1.29 or 5.74% intraday. The stock has experienced some volatility, with a daily low of $23.76 and a daily high of $26.08. Over the past year, Unity Software’s stock price has ranged from a low of $13.90 to a high of $39.29.
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