GameStop and AMC each rise more than 70% as the ‘Roaring Kitty’ meme trader resurfaces

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GameStop shares are rising: Here's what you need to know

GameStop And AMC Stock prices rose dramatically on Monday after “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, was posted online for the first time in about three years.

The maila photo on Reddit– since 2021. The post has received 63,000 likes in 13 hours.

GameStop rose 74.4% after surging as much as 110%. GameStop trading was halted several times due to volatility. AMC also caught the trading frenzy, ending Monday’s session up as much as 78.4% after doubling its price at one point. Reddit gained almost 9%.

Roaring Kitty, whose legal name is Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance. Also known as DeepF——Value on Reddit, Gill attracted an army of day traders who encouraged each other and dived into physical video game stock and GameStop call options between 2020 and 2021.

The “meme stockThe frenzy involved individual investors targeting short sellers and hedge funds pessimistic about the prospects for GameStop and other companies, forcing them to cover their short positions and drive up the price of the target stocks. Currently, GameStop stock is shorted at over 24% of all its freely tradable shares, otherwise known as the float.

Gill later posted a few videos showing scenes from popular TV shows and movies, but there is no clear indication of what they mean.

GameStop was by far the most talked about stock on Reddit’s WallStreetBets on Monday, with more than 600 mentions in the past 24 hours, surpassing popular chipmaker Nvidia, according to market research platform Quiver Quantitative.

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Melvin Capital felt the wrath of WallStreetBet traders. The hedge fund heavily shorted GameStop and became a target of the army of amateur traders, who suffered massive losses that spawned Ken Griffin’s Citadellike Point72to shore up Melvin’s finances with nearly $3 billion in aid.

Short selling is a strategy in which investors borrow shares of a stock at a certain price with the expectation that the market value will fall below that level when it is time to pay for the borrowed shares.

The GameStop mania that pushed the stock above $120 per share, adjusted for the split, from just $3 in a span of three months in early 2021 forced brokers including Robin Hood to limit trading in heavily shorted stocks. In response, a Robinhood user filed a class action lawsuit following the app’s decision to restrict GameStop trading on its platform. The lawsuit was dismissed in August 2023.

Another class action lawsuit against Gill alleged that he posed as a novice trader despite being a licensed professional.

The volatility led to a series of hearings in Congress on brokers’ practices gamifying retail, and testimonials from leaders at Robinhood, Melvin Capital, Reddit and Citadel, as well as Gill. The entire episode ultimately inspired the 2023 film”Stupid money,which starred Paul Dano Gill.

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GME 5-year chart

In January 2021, GameStop shares hit an all-time high of $120.75 intraday, adjusted for a subsequent 4-for-1 stock split in the summer of 2022. But as individual investor interest eventually faded, the stock plunged along with others meme shares in. as AMC Entertainment Holdings. GameStop hit a three-year low of $9.95 last month.

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Recently the shares have started to rise, which may have reignited Gill’s interest, along with the massive amount of short interest in the name. GameStop is up 57% so far in May, closing at $17.46 on Friday.

But the fundamentals at GameStop, as reflected in its most recent earnings report, paint a discouraging picture for the video game company. In late March, GameStop said it had cut an unspecified number of jobs to reduce costs and reported lower fourth-quarter revenue amid increasing competition from e-commerce-based rivals.

GameStop posted revenue of $1.79 billion for its fiscal fourth quarter, compared with $2.23 billion in the same quarter a year earlier.

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