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Shares of video game retailer GameStop almost doubled in value on Monday after a single post by a social media account named “Roaring Kitty”, in a frenzy that recalled the “meme stock” craze at the start of the decade.
Roaring Kitty is the account on social media platform X of Keith Gill, a day trader whose videos during the meme-stock bubble encouraged millions of others into the market, in turn propelling stocks such as GameStop to dizzying heights.
Gill’s account, inactive since June 2021, came back to life on Sunday when it posted a meme of a man leaning forward in his chair, an image GameStop had posted on its own X account in February. The post had been viewed more than 14mn times by midday in New York.
GameStop’s shares, which had already climbed more than 60 per cent between May 1 and May 10, soared as much as 119 per cent in early trading on Monday, ending the session up 74 per cent.
Monday’s jump suggested “there’s still a cult of equity” for some retail investors, said Kevin Gordon, a senior investment strategist at Charles Schwab.
GameStop became an emblem of the meme-stock turmoil when its price rose as much as 2,400 per cent in 2021.
Gill, who is also known on Reddit as DeepFuckingValue, had in 2020 drawn attention to the sizeable bets against the company, correctly predicting that a price increase could force short sellers to buy the stock to cover their large short positions.
One of the highest-profile victims of the short squeeze was New York hedge fund Melvin Capital, which lost 53 per cent of fund’s value in January 2021. Gill’s former employer, the insurer MassMutual, was later fined $4mn for failing to oversee his social media use.
Investors in meme stocks also targeted other businesses whose shares were heavily shorted in 2021, including AMC Entertainment and BlackBerry. Both of those companies climbed on Monday, with AMC shares closing 78 per cent higher and BlackBerry up 7 per cent.
“But it’s not a clear frenzy across the board,” Gordon said, noting that prices for cryptocurrencies and other so-called speculative assets remained subdued on the day.
Data from S&P Global showed that 29 per cent of GameStop shares were on loan on Friday — a gauge of short interest in the stock.
Its net profit rose to $6.7mn for the fiscal year to February 3 2024, from a net loss of $313.1mn the previous year. Net sales were $5.3bn, down from $5.9bn in 2022.
Roaring Kitty uploaded a second tweet later on Monday, a minute-long video spliced with clips of comic book heroes and villains powering up ahead of battle to the theme of 1967 spaghetti western The Big Gundown.
A third tweet mashed together clips from the film Ferris Bueller’s Day Off, the TV show Breaking Bad and a passage from a melancholy Radiohead song. Neither post referenced GameStop.
Reddit’s WallStreetBets forum, which exploded in popularity during the pandemic, was on Monday abuzz with Roaring Kitty memes and potentially facetious comments.
One user wrote: “I’ve got $100k and I’m ready to risk it all.”
“Here we go again, boys,” said another.
Retail flows into GameStop were relatively light at about $4.4mn last Friday, according to VandaTrack, a data company that monitors retail investment trends. In January 2021, retail inflows into the stock rose above $80mn a day.
