Grapevine, Texas – GameStop, a videogame retailer, experienced a significant surge in its shares, increasing by 70% as “Roaring Kitty” reemerged on X.com after a three-year absence from social media. This former marketer at an insurance firm has been credited with sparking the 2021 meme stock rally. The company’s shares reached an 18-month high of $38.20 and were temporarily halted multiple times due to volatility, setting the stage for the highest one-day percentage gain since 2021.
The rally of GameStop also had a positive impact on other meme stocks that had struggled throughout the past year. AMC, a theater chain, saw a 27% jump, while Koss Corp, a headphones maker, soared by 23%. “Roaring Kitty,” also known as Keith Gill on YouTube and DeepF***ingValue on Reddit, played a crucial role in the Reddit rally that caused GameStop’s shares to skyrocket by as much as 21-fold over a two-week period in January 2021. However, the stock eventually plummeted back to its pre-surge levels in the following days.
Gill recently posted a cryptic sketch on X, his first post since mid-2021, hinting at a potential resurgence in market interest. Despite requests for comment, “Roaring Kitty” has not responded, leaving speculation to run wild about the reasons behind the sudden market activity. GameStop and AMC emerged as the most traded stocks among retail investors, as noted by J.P.Morgan data.
GameStop, facing financial struggles, had to implement job cuts and reported lower fourth-quarter revenue in March. Despite a significant uptick in share prices in May, the company still lags far behind its peak of $120 in 2021. Thomas Hayes, chairman at Great Hill Capital LLC, expressed skepticism about the sustainability of another meme stock mania, emphasizing that the unique circumstances of 2021 are unlikely to be replicated.
The meme stock rally led by Gill’s posts on Reddit’s Wallstreetbets group in 2021 had a ripple effect on other highly shorted stocks like AMC, drawing attention from U.S. regulators. The resurgence of interest in GameStop has raised concerns among investors, with short sellers facing potential significant losses. Options activity surrounding the stock has seen a notable increase since the beginning of May, with open interest in call options hitting a yearly peak before slightly retracting. Overall, market experts express caution and highlight the unpredictability of meme stock movements in the current financial landscape.