By Medha Singh and Laura Matthews
(Reuters) – Shares of videogame retailer GameStop surged 70% on Monday after “Roaring Kitty,” the insurance company’s former marketer credited with fueling the 2021 meme stock rally, returned to X.com after a three-year hiatus from social media. .
Shares of GameStop hit an 18-month high of $38.20 and have been halted several times due to volatility. They went for the sharpest one-day percentage gain since 2021.
The Grapevine, Texas-based company’s rally lifted other recall stocks that have been hammered over the past year. Theater chain AMC rose 27%, while headphone maker Cos Corp rose 23%.
Keith Gill, known as “Roaring Kitty” on YouTube and “DeepF***ingValue” on Reddit, was a key figure in the so-called Reddit rally that sent GameStop’s stock up 21-fold in two weeks. January 2021, before collapsing to pre-rise levels in the following days.
On Sunday Gill posted a sketch of a man leaning forward in a chair, a popular meme among gamers, with no caption indicating that things are getting serious.
His first cryptic post on X on previous Twitter, after being absent from social media platforms since mid-2021.
“Roaring Kitty” did not immediately respond to a Reuters request for comment.
GameStop and AMC were the most traded stocks among retail investors at 11 a.m. ET, JPMorgan data showed.
Roaring Kitty “seems suspicious of renewed interest today.
“There is no fundamental change in any of the institutions popularized in this event.”
In March GameStop cut an unspecified number of jobs to cut costs and cut fourth-quarter revenue.
Shares of the struggling video game retailer were up more than 57% in May through Friday’s close, but are still below the $120 peak set for 2021.
“It’s unlikely that you’re going to see Meme Stock Mania again for any period of time, because that was when you had a lot of people stuck at home with free money, and that’s not the case anymore,” he said. Thomas Hayes, President of Great Hill Capital LLC.
The stock rally in 2021 meme was inspired by Gill’s posts on Reddit’s WallstreetBets discussion group about the profits he made from his investments in a very short company.
The rally spread to other heavily shorted stocks, including AMC, as Reddit users rallied to squeeze the bullish hedge funds that have seen them lose billions and face scrutiny from U.S. regulators.
The entire episode inspired Craig Gillespie’s 2023 film “Dump Money.”
Short selling and options activity
GameStop has a quarter of its publicly available shares shorted and bearish investors could lose $1.23 billion on Monday’s paper, according to analyst firm Artex.
Short sellers typically sell the borrowed stock at a profit and then buy it back 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 on the stock has been picking up since early May.
Open interest in call options hit 588,205 on May 10, up from 501,296 on Monday, according to TradeAlert data.
“Companies looking at GameStop from the short side will remember what happened in 2021 and sit this one out,” said Chris Murphy, Susquehanna’s co-head of derivatives strategy.
(Reporting by Medha Singh in Bengaluru; Additional reporting by Pranav Kashyap, Sruthi Shankar, Akash Sriram and Sristi Achar; Editing by Shinjini Ganguly)
