GameStop Storms 110% Toward Best Day Since 2021 On Return of Meme Stock Folk Hero ‘Roaring Kitty’

The idea that a meme might rally the shares of a faltering firm was beyond the wildest dreams of anyone. Investors have taken note of the reappearance of a trader who initially created the meme stock phenomena in 2021.

After a three-year absence, Keith Gill, sometimes referred to as Roaring Kitty, has made a comeback to social media. Gill shared a picture of a man leaning forward while seated on a chair and holding a game console.

The shares of a firm that have gained popularity on social media platforms as a result of heightened social mood are known as meme stocks.

The meme stock mania’s main stock, GameStop, had shared the same stock in February of 2021. Know Your Meme, an online meme database, interprets the meme as “when things get serious.”

GameStop shares increased 74% on May 13 as a result of a straightforward X post that brought back memories of the 2013 meme stock craze for investors. Due to the stock’s extreme volatility, trading had to be stopped many times during the day as it had surged by 119 percent.

Why is the market responding to the post made by Roaring Kitty? Exactly who is he?

Gill, a Reddit user known as “Deepf******value,” was one of the main forces behind GameStop’s enormous surge on Wall-Streeters’.

On June 8, 1986, he was born in Brockton, Massachusetts. Prior to serving as the head of education and fitness at a division of MassMutual, he participated in track and field in high school, as reported by the Wall Street Journal and Investopedia. In 2014, he signed up for the social networking site X, which was once known as Twitter. He signed up for Reddit in 2019 and YouTube in 2015.

A US Congressional hearing was prompted by the viral stock surge and claims of Wall Street businesses manipulating the market. At the time, there was news that the trading app Robinhood had stopped dealing GameStop stocks due to pressure from multiple hedge funds who were losing money.

Gill stated in the court that he was a casual day trader and refuted claims that he was trying to ignite a 2021 meme stock craze. He thought investors would find the stock to be a compelling investment. “I simply enjoy the stock,” Gill had renowned declared.

How the craze for GameStop started

Hedge funds, who were shorting the shop’s shares in an attempt to gamble against the company’s existence, squared up against small traders in 2021 when traders began to wager on the US-based video game retailer.

By acquiring thousands of GameStop shares in defiance of nearly all established indicators alerting investors to the company’s impending bankruptcy, Gill and a number of other supporters turned the company’s fortunes around.

That started the so-called “short squeeze,” in which large investors who had wagered against GameStop were compelled to purchase the company’s quickly increasing shares in order to make up for their enormous losses.

Following GameStop’s 2021 surge, the stock prices of a few other companies, like AMC Entertainment and Bed Bath & Beyond, also skyrocketed.

In 2021, GameStop’s stock had a surge of over 1,000 percent, while AMC, a failing network of movie theatres, saw a very quick jump of 2,300 percent. According to research by analytics firm S3 Partners, a number of well-known hedge funds, including Citron Research and Melvin Capital, lost an estimated $5 billion as a result of these enormous gains.

At the height of the meme stock craze in 2019, Gill, who had earned around $53,000 in GameStop investments in 2019, profited $48 million, according to sources. CNN reports that the retailer’s stock price reached a high of $483 in 2021. Gill may have sold his equities during or after the meme stock rise, but this is unknown.

The narrative of Roaring Kitty and the meme stock mania was made into the film “Dumb Money” last year.

What transpired following Gill’s first post in three years on May 13?

AMC Entertainment gained 78 percent, Reddit shares increased by 9 percent, and Robinhood Markets’ shares increased by 4 percent, excluding the spike in GameStop stock.

On May 13, short sellers disclosed mark-to-market losses of more than $1 billion on wagers against GameStop.

The fact that he can draw a crowd indicates that people are once again experiencing extreme FOMO and YOLO, according to Peter Atwater, president of Financial Insights and adjunct professor at William & Mary and the University of Delaware. “One way that people show their extreme confidence is when they jump into things that have pure speculative value,” the statement reads.

Why the abrupt comeback?

Now, on Sunday, Keith snapped his three-year absence with a tweet, stirring investor enthusiasm and sending the video game retailer’s shares plunging almost 110% higher on Monday morning.

Throughout the day, there were many trading halts; yet, GameStop’s shares ended the day up by more than 74%.

Beyond GameStop, other meme stocks had significant increases as well; AMC Entertainment saw a 78% increase. In the meanwhile, there were gains of over 6% and over 5% for the well-known meme currencies Dogecoin and Shiba Inu, respectively.

Gill gained notoriety during the epidemic as a result of his optimistic Reddit analysis of GameStop. His most recent post, which included a picture of a concentrated gamer reclining on their chair, sparked rumours among fans that he could make a comeback to Reddit.

As of Monday morning, more than 10 million people had seen the tweet.

How the GameStop meme craze began

When every individual investor under lockdown saw that GameStop’s stock was at an all-time low, they recognized a chance to seize it. Great financial experts like Gill are the ones who first revealed the truth about the stock’s undervaluation and investors’ excessive shorting in the DeepFuckingValue and Roaring Kitty internet communities.

The practice of loan and selling stocks with the goal of buying them back at a lower price and profiting from the price differential is known as short-selling. In a video dated August 21, 2020, Gill noted that the GameStop stock was significantly shorted, mostly by hedge funds. He said that if there was a severe short squeeze, these funds may be forced to buy back their shares and liquidate their positions, which would raise the stock price.

How was GameStop’s stock mania before to the meme?

The meme stock phenomena known as GameStop peaked in 2021, propelled by a group of modest investors encouraged by Wall-Streeters’ on Reddit and stoked by Elon Musk’s “Gemstone” Twitter endorsement.

GameStop’s shares shot up from $3 to $120 during this boom.

Since its high in 2021, however, GameStop’s route has encountered challenges as virtual reality gaming has become more popular and mobile gaming continues to be the dominant force in the market. The fourth-quarter financial announcement from the video game store was bleak and depressing, with poor sales numbers and significant layoffs.

GameStop shares soar again as ‘Roaring Kitty’ brings back meme stock mania.

May 14, Reuters The popular retail stock picks, AMC (AMC.N), opens new tab, and GameStop (GME.N), opens new tab, had tremendous gains on Tuesday due to posts by “Roaring Kitty” Keith Gill, which sparked speculation about the potential reappearance of the main character behind the 2021 meme stock craze.

During the trading day, shares of the world’s largest theater chain, AMC, and U.S. video game store, GameStop, more than doubled in value. GameStop’s stock closed 60% higher at $48.75, the highest level since June 2021. AMC shares finished roughly 32% higher at $6.85, marking the largest rise since January 2021.

The protest got underway on Monday after Gill posted a meme along with over ten movie snippets, including “The Avengers,” “X-Men Origins: Wolverine,” and the 1993 Western “Tombstone.”

GameStop and AMC were the most traded equities by retail investors on Monday and Tuesday as of 10:30 a.m. ET (1430 GMT), according to J.P. Morgan data, despite the postings’ omission of the names of the companies.

With optimistic calls on GameStop, Gill, whose tweets signalled his return to social media platform X after almost three years, is recognized for having ignited the so-called Reddit rally in January 2021.

According to Matthew Tuttle, CEO of Tuttle Capital Management, “the fact that Roaring Kitty is back should have no bearing whatsoever on the stock market, but the fact that it isn’t is fascinating.”

Since Friday’s closure, the value of GameStop’s shares has almost quadrupled, bringing its market capitalization to over $18 billion.

According to analytics company Ortex Technologies, short sellers lost $1.6 billion on paper on Tuesday, bringing their total losses since Monday to $2.4 billion.

Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, stated that “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.”

Meanwhile, AMC’s shares shot up 78% to $5.19 on Monday, more than double its record low that was reached in mid-April, following the completion of a $250 million “at-the-market” share sale program.