Tags: meme | roaring kitty | gamestop | amc stocks

Roaring Kitty Is Back; GameStop Surges 70%

Roaring Kitty Is Back; GameStop Surges 70%
WallStreetBets trader, Keith Gill, who runs the youtube channel "Roaring Kitty," appears to have purchased 50,000 more shares of GameStop. (AP)

Monday, 13 May 2024 11:48 AM EDT

Shares of videogame retailer GameStop surged 70% Monday after "Roaring Kitty," a former marketer at an insurance firm credited with sparking the 2021 meme stock rally, returned to X.com after a three-year hiatus from social media.

GameStop's shares hit an 18-month high at $38.20 and were halted multiple times for volatility. They were headed for the sharpest one-day percentage gain since 2021.

The Grapevine, Texas-based firm's rally also boosted other meme stocks that have been hammered over the past year. Theater chain AMC jumped 27%, while headphones maker Koss Corp soared 23%.

Keith Gill, known as "Roaring Kitty" on YouTube and "DeepF***ingValue" on Reddit, was a key figure in the so-called Reddit rally, which saw shares of GameStop surge as much as 21-fold over two weeks in January 2021 before crashing to pre-surge levels in the subsequent days.


Gill on Sunday posted a sketch of a man leaning forward in a chair, a popular meme among gamers that indicates things are getting serious, with no caption.

The cryptic post is his first on X, earlier Twitter, after being notably absent on social media platforms since mid-2021.

"Roaring Kitty" did not immediately respond to a Reuters request for a comment.

GameStop and AMC were the most traded stocks among retail investors at 11 a.m. ET, J.P.Morgan data showed.

Roaring Kitty "seems to be the most likely suspect for the renewed interest today... but I would be careful not to characterize the participants in this phenomenon as investors," said Art Hogan, chief market strategist at B Riley Wealth.

"There's no fundamental change in any of the companies that are popularized in this phenomenon."

GameStop in March cut an unspecified number of jobs to reduce costs and reported lower fourth-quarter revenue.

Shares of the struggling videogame retailer have surged over 57% in May up to Friday's close, but still remain sharply below their $120 peak of 2021.

"It's unlikely you're going to see a repeat of meme stock mania for any sustained period of time because it was a point in time when you had a bunch of people stuck at home with free money and that's no longer the case," said Thomas Hayes, chairman at Great Hill Capital LLC.

The meme stock rally in 2021 was set off by Gill's posts on Reddit's Wallstreetbets discussion group about the gains he had made on his investments in the highly shorted firm.

The rally spread to other highly shorted stocks including AMC as Reddit users banded together to squeeze bearish hedge funds, costing them billions in losses and drawing scrutiny from U.S. regulators.

The entire episode inspired Craig Gillespie's 2023 movie "Dumb Money."


GameStop has about a quarter of its publicly available shares in short position and the bearish investors were set to lose $1.23 billion on paper on Monday, analytics firm Ortex said.

Short sellers typically sell borrowed stocks in hopes to make a profit by buying back later when the price falls. On Monday, no GameStop shares were available for borrowing on trading platform Interactive Brokers, a Berlin-based trader confirmed.

Meanwhile, options activity in the stock has been on the rise since the beginning of May.

Open interest in call options hit 588,205 on May 10, the highest this year, before slightly pulling back on Monday to 501,296, according to TradeAlert data.

"Institutions looking at GameStop from the short side will remember what happened in 2021 and be more likely to sit this one out," said Chris Murphy, co-head of derivatives strategy, Susquehanna.

© 2024 Thomson/Reuters. All rights reserved.

The man at the center of the pandemic meme stock craze returned to the social platform X for the first time in three years and sent prices of some of those stocks surging overnight.
meme, roaring kitty, gamestop, amc stocks
Monday, 13 May 2024 11:48 AM
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