GameStop’s stock soared by an astonishing 110% this Monday, shaking the markets as it was halted due to extreme volatility. This surge traces back to “Roaring Kitty,” also known as Keith Gill, who lit the fuse for the meme stock frenzy during the pandemic with his return to online posting for the first time since 2021. And guys? It is nothing short of iconic!
The Spark that Reignited GameStop
Keith’s recent activity on X, the platform formerly known as Twitter, featured a meme of a video gamer intensely focused, hinting at serious business ahead. This post is his first since a noticeable absence that began in June 2021.
Known for his bullish views on GameStop, Keith became a celebrated figure on the WallStreetBets subreddit and YouTube. His insights not only captivated a broad audience but also steered a massive short squeeze in January 2021, compelling him to explain his moves before Congress.
On Monday, data from S3 Partners highlighted that short interest in GameStop remains high, approximately 24% of its float. As GameStop’s stock climbed, short sellers faced increasing pressures, with losses mounting to $1.34 billion for May and $952 million for the year.
Rally Amid Meme Stock Surge
This spike in GameStop’s stock value is part of a wider rally in meme stocks, evidenced by massive gains in others like AMC and Trump Media & Technology. This phenomenon, as explained by Yahoo Finance’s Jared Blikre, reflects not a warning sign as before but a strong appetite for risk among investors.
Despite the excitement, some experts urge caution. Art Hogan of B Riley Wealth commented that the participants in this upswing should not be viewed strictly as investors due to the absence of fundamental changes in the involved companies. GameStop itself had reported job cuts and lower revenue in the fourth quarter to reduce costs.
On the same day, GameStop reached a one-year high and captured considerable attention on platforms like stocktwits.com and X.com, alongside Roaring Kitty and the trading platform Robinhood. Analysts pointed out the shortage of available GameStop shares for borrowing, signaling a tight market.
However, while GameStop’s stock has risen over 57% in May, it is still about 80% below its 2021 peak. Experts like Thomas Hayes of Great Hill Capital suggest that a repeat of the meme stock mania is unlikely under current conditions, differing significantly from the early pandemic days of idle hands and free money.
Echoes of the Past, Glimpses of the Future
The dramatic rally of 2021, sparked by Keith’s enthusiastic investment posts on Wallstreetbets, extended to other highly shorted stocks like AMC.
This collective action by Reddit users forced a painful squeeze on hedge funds betting against these stocks, leading to a notable showdown between Wall Street and Main Street. The ensuing scrutiny even drew federal attention, leading to testimonies before Congress by Keith and others involved.
These events were compelling enough to inspire the movie “Dumb Money,” released last year, highlighting the cultural impact of the meme stock drama.
While the stocks have relinquished most of their gains from 2021, the spirit ignited by Roaring Kitty continues to influence market dynamics, reminding everyone of the power individual investors can wield when rallied around a common cause.
Since his first post around eighteen hours ago, Keith has posted two more videos in his typical ominous and mysterious fashion.
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