Shares of the video game retailer jumped 70% to its highest level since June 2021, while those of the world's largest theater chain surged 90% amid multiple trading halts due to volatility.

The rally began in the previous session after Gill shared a meme and more than 10 clips from movies, including "X-Men Origins: Wolverine," "The Avengers" and 1993 Western "Tombstone."

Even though the posts did not mention company names, GameStop and AMC were the most-traded stocks by retail investors on Monday and Tuesday as of 10:30 a.m. ET, J.P.Morgan data showed.

That was mainly because Gill, who is returning to social media platform X after a gap of nearly three years, is credited with sparking the so-called Reddit rally in January 2021 with bullish calls on GameStop.

"The fact that Roaring Kitty is back should be totally meaningless to the stock market (but) the fact that it isn't is fascinating," said Matthew Tuttle, CEO of Tuttle Capital Management.

GameStop's shares have nearly tripled in value since Friday's close, with its market capitalization jumping to $16 billion.

Short sellers have lost $1.6 billion on paper on Tuesday, taking combined losses since Monday to $2.4 billion, analytics firm Ortex Technologies said.

"Today's losses will put a lot of short sellers on tilt and squeeze them out of their positions with their buy-to-covers pushing GME's stock price even higher," said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

Meanwhile, AMC completed a $250 million share sale at the market price on Monday as its stock surged 78% to $5.19, more than double from a record low hit in mid-April.

The frenzy also spread to shares of micro-cap companies.

Headphones maker Koss, U.S.-listed shares of BlackBerry and food storage container company Tupperware rose between 15% and 30%.

Shares of Reddit added 7.4%. The social media firm was used by retail investors in 2021 to coordinate and target highly shorted stocks that culminated in a Wall Street versus Main Street battle.

Retail investor-focused brokerage Robinhood, which made zero-commission trades mainstream, gained 8.2%.

"This is ridiculous but all a part of free markets," said Andrew Left at Citron Research, a former GameStop short seller.

RETAIL FRENZY IN NEW ECONOMY

Unlike 2021, speculative trades are not likely to last long in the current economic condition, some analysts said as the era of cheap money has been replaced by high inflation and interest rates.

"This meme rally maybe rhymes with 2021 but is unlikely a repeat," said Ben Laidler, global markets strategist at digital brokerage eToro.

About 600,000 GameStop options contracts changed hands on Monday, far below the volumes of one million to two million contracts in early 2021, said Brent Kochuba, founder of options analytic service SpotGamma.

However, the implied volatility of GameStop options, a measure of investor expectations for price swings in the shares, jumped very quickly in the previous session to levels that rivaled 2021.

"This suggests that the reaction of market makers (increasing options prices) to a potential repeat of GameStop mania was very fast," he said.

BETTER EQUIPPED

Institutional investors are also better equipped to handle the situation, market participants said, after the surprise collective force of individual investors cost hedge funds billions in losses three years ago.

In the past five sessions, the average retail traders' share of total GameStop turnover was around 7% and about 10% for AMC, said Marco Iachini, senior vice president at Vanda Research.

That indicates, he said, it was not only retail traders but also institutional investors participating in large numbers.