GameStop (NYSE:GME) may be in the business of selling video games, but it’s been meme fun and games that have driven price action for GameStop stock for quite some time. Most recently, with the “Roaring Kitty” rallies that took shape during May and June.

But now, with Keith Gill, the man behind the “Roaring Kitty” persona is now in hot water for alleged stock manipulation. The famed meme trader crawled back into the woodwork.

This could mean an end to the recent series of meme waves that have helped to make GME a profitable trade. At least, for those who got the timing right.

Once more, focus with GameStop could be shifting back to the company’s fundamentals. Put simply, that’s bad news for investors. With the company’s underlying performance still getting worse, another round of big price declines may be just around the corner.

GameStop Stock: ‘Meme Mania’ Fading Fast, Despite ‘Roaring Kitty’ Lawsuit Dismissal

Two months back, the “return of Roaring Kitty” took GME off the road to its “game over” moment. Shares leapt back into the fast lane, resulting in an epic surge for the “meme king.”

As detailed in one of our previous GameStop stock articles, the “Roaring Kitty rallies” of May and June sent GME back up to as much as $64.83 per share.

Alongside providing an opportunity for traders to realize fast money profits, these waves of epic run-ups also enabled the company to seize the opportunity. How? By selling newly-issued shares into the market.

Since the “meme waves,” however, GameStop shares have pulled back. This month, and in the months ahead, shares could stay on a downward trajectory.

Yes, Keith “Roaring Kitty” Gill has seemingly gotten out of hot water. A stock manipulation lawsuit filed against the trader getting voluntarily dismissed within hours of its announcement to the public.

Still, this brief controversy could end up making it difficult for Gill to influence the market with subsequent social media posts. With many investors burned by buying in “meme waves” too late, there may also be fewer players left to dabble in the aforementioned meme fun and games.

Turnaround Optimism Fading as Well

Alongside the possibility of “meme mania” continuing to fade, there’s something else brewing that may mean lower prices ahead for GameStop stock.

That would be the latest “news” regarding GameStop’s turnaround efforts. Ryan Cohen, who is both the company’s CEO as well as its largest shareholder, is leading these efforts.

It’s not as if investors remain very confident in a Cohen-led “digital transformation” for the video game retailer.

However, as InvestorPlace’s Shrey Dua reported July 1, Cohen’s latest X.com post, announcing GameStop’s desire to hire some mobile app developers, isn’t doing to much to re-raise expectations.

At least, based on the fact that GME declined by more than 5% following this post. Yes, the “Roaring Kitty” lawsuit likely played a larger role in sending GameStop lower earlier this week.

Still, while not certain, Cohen’s social media post may be further indication that GameStop remains far behind in its turnaround efforts.

Instead, it’s still primarily an unprofitable bricks and mortar retailer in the midst of a terminal decline.

In time, as the hope and hype surrounding shares keeps on dissipating, and the stock completely loses its “meme premium,” a sudden drop to a valuation more is very much possible.

The Verdict: Stay on the Sidelines For Now

When it comes to GameStop, or comeback contender, anything’s possible. Who knows, with the $2.14 billion raised during the recent meme waves, perhaps GME could buy itself out of its current predicament.

Maybe it will use this cash to acquire a faster-growing business with a more promising future.

Until then, however, there’s no need to hold exposure to GME, simply on the hopes that the situation improves for the better.

Barring another “meme wave,” and barring GameStop announcing a game-changing acquisition, a side back to its lows, or to even lower prices, appears to be the cards.

In other words, downside risk of at least 57%. With this in mind, it’s pretty clear that staying on the sidelines is your best course of action when it comes to GameStop stock.

GameStop stock earns a C rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.