GameStop shares saw a significant surge Monday morning after Keith Gill, known online as “Roaring Kitty,” made a viral reappearance on social media.
Gill, who gained fame during the 2021 meme stock frenzy, posted on X (formerly known as Twitter) a picture of a man with a gaming controller, suggesting his return to trading activities. The post garnered massive attention, with over 12 million views shortly after being published.
Gill’s comeback has sparked renewed interest in GameStop, leading to a nearly 175% increase in its stock value through May. However, the stock remains significantly below its peak from the 2021 surge, when coordinated efforts by retail traders on platforms like Reddit’s WallStreetBets had led to dramatic stock price increases, impacting heavily shorted stocks like GameStop and AMC.
Gill allegedly owns five million GameStop shares, which were valued at $115.7 million at Friday’s closing price. A snapshot of 120,000 call options with a $20 strike price and an expiration date of June 21st was also displayed by GameStop. The purchase price of each call option was around $5.68.
The price of GameStop originally spiked three weeks ago, when Gill made his first online appearance in three years. A meme depicting a man leaning forward in his chair was shared on X in May by the “Roaring Kitty” account (gamers use this meme to indicate when things are getting serious).
GameStop was a video game shop that was having difficulty surviving in 2021 as customers quickly shifted from discs to digital downloads. Major investors and Wall Street hedge funds were shorting the company’s stock, or betting against it, on the assumption that its shares would continue their sharp decline.
By acquiring thousands of GameStop shares despite nearly all recognized indicators alerting investors to the company’s impending insolvency, Gill and his supporters altered the course of a business that seemed destined for disaster. 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.
While the current situation has rekindled some of the excitement from 2021, experts caution against expecting a repeat of the 2021 mania, as the market conditions and investor behaviors have evolved since then.
