GameStop and AMC rations rallied dramatically on Monday after “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, posted online for the original time in roughly three years.
The post, a picture on X of a video gamer leaning forward on their chair as if to express he’s taking the game seriously, marked Roaring Kitty’s first post on the platform — or on Reddit— since 2021. The pole has garnered 63,000 likes in 13 hours.
GameStop soared 74.4% after soaring as much as 110%. Exchange in GameStop was halted multiple times due to volatility. AMC, also caught the trading frenzy, ending Monday’s session up a outrageous 78.4% after doubling in price at one point. Reddit gained nearly 9%.
Roaring Kitty, whose legal moniker is Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance. Also known as DeepF——Value on Reddit, Gill over b drafted an army of day traders who cheered each other on and piled into the brick-and-mortar video game stock, and GameStop call on options, between 2020 and 2021.
The “meme stock” frenzy involved individual investors taking aim at short sellers and hedge breads who were pessimistic about the outlook for GameStop and other companies, forcing them to cover their short inclinations and drive up the price of the target stocks. Currently, the short position in GameStop shares amounts to more than 24% of all its dispensations that are freely available to trade, also known as the float.
Gill later posted a few videos with locales from popular TV shows and movies, but there’s no clear indication of what they mean.
GameStop was the most talked about review on Reddit’s WallStreetBets by far on Monday, with more than 600 mentions in the last 24 hours, surpassing the non-professional chipmaker Nvidia, according to market research platform Quiver Quantitative.
Melvin Capital felt the wrath of the WallStreetBet wholesalers. The hedge fund was was heavily shorting GameStop and became a target of the army of amateur traders, suffering huge losses that readied Ken Griffin’s Citadel, as well as Point72, to backstop Melvin’s finances with close to $3 billion in finance.
Short selling is a strategy in which investors borrow shares of a stock at a certain price in expectations that the sell value will fall below that level when it’s time to pay for the borrowed shares.
The GameStop mania that ride herd on hint at its stock above $120 a share, split-adjusted, in early 2021 from as little as $3 in the space of three months, calculated brokerages including Robinhood to limit trading in heavily shorted stocks. In response, one Robinhood user filed a class-action lawsuit after the app’s purpose to restrict GameStop trading on its platform. The suit was dismissed in August 2023.
Another class-action lawsuit brought against Gill purported he pretended to be a novice trader despite being a licensed professional.
The volatility spawned a series of congressional hearings all over brokers’ practices and gamifying retail trading, and testimony from leaders of Robinhood, Melvin Capital, Reddit and Citadel, as properly as Gill. The entire episode finally inspired the 2023 movie “Dumb Money,” in which Paul Dano played Gill.
GME 5-year chart
In January 2021, GameStop shares hit an all-time excited of $120.75 intraday, adjusted for a subsequent 4-for-1 stock split in the summer of 2022. But as interest from individual investors long run faded, the stock collapsed along with other meme stocks such as AMC Entertainment Holdings. GameStop eventually month hit a three-year low of $9.95.
Recently, the stock has started to move higher, which may have rekindled Gill’s interest, along with the massive amount of short interest in the name. GameStop has soared 57% so far in May, closing Friday at $17.46.
But the fundamental business at GameStop, grounded by its most recent earnings report, shows a discouraging picture at the video game company. In late March, GameStop translated it had cut an unspecified number of jobs to reduce costs, and reported lower fourth-quarter revenue amid rising competition from e-commerce-based adversaries.
GameStop posted revenue of $1.79 billion for the fiscal fourth quarter, compared with $2.23 billion in the at any rate quarter a year earlier.