GameStop shares are skyrocketing after meme stock trader posts for first time in 3 years
Originally Published: 13 MAY 24 10:16 ET
Updated: 13 MAY 24 11:57 ET
By Krystal Hur, CNN
New York (CNN) — The surprise social media return of the trader who helped ignite the meme stock frenzy in 2021 sent GameStop shares skyrocketing Monday. The surge had nothing to do with the troubled company’s fundamentals — and everything to do with a cartoon of a gamer that the trader, nicknamed Roaring Kitty, shared on X.
GameStop shares surged 68% on Monday after the account run by Keith Gill shared a meme on X, marking its first post in three years. The shares skyrocketed by more than 110% earlier and were halted for volatility several times on Monday morning.
Short sellers have seen $1 billion in mark-to-market losses betting against GameStop on Monday, according to data company S3 Partners. Short sellers aim to turn profits on a stock by borrowing shares, selling them and returning them after purchasing them at a lower price.
Shares of trading platform Robinhood, which suspended purchases of GameStop, AMC Entertainment and other meme stocks during the frenzy in 2021, rose 7%. Shares of AMC popped 31%. Reddit shares climbed 13%.
The image Gill posted depicts a man leaning forward in a chair with a video game console in hand. GameStop had posted the same cartoon in February, but with a red arrow and chair. In Gill’s cartoon, they are blue. The meme is interpreted to convey, “when things get serious,” according to Know Your Meme.
Gill did not immediately respond to CNN’s request for comment.
GameStop shares tripped multiple circuit breakers – a temporary and mandated halt in trading to let investors cool off for a bit. Robinhood denied claims on social media on Monday that it had once again halted GameStop stock purchases on its platform.
“This is incorrect. Robinhood has not shut down the purchase of Gamestop shares,” Robinhood spokesperson Anupriya Ghate said in a statement to CNN. “GME is seeing elevated volatility and movement, which triggers market-wide exchange trading limits and halts. These are market-wide and not specific to Robinhood.”
Who is Roaring Kitty?
Gill, who goes by “Deepf—-ingvalue” on Reddit, was one of the leading forces on the WallStreetBets subreddit that drove eye-popping returns in GameStop’s stock. The traders bid up shares of the retailer targeted short sellers.
The retail investors sent other stocks soaring in 2021, including AMC Entertainment and Bed Bath & Beyond. They are now collectively known as meme stocks, or shares of companies with a cult following that see wide swings based on their popularity among trader communities on social media rather than their fundamentals.
Gill described himself as a casual daytime trader in testimony during a 2021 Congressional hearing on the GameStop mania. He has said he did not set out to help stoke the GameStop frenzy and instead believed that the stock was an attractive opportunity for investors.
“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill said in written testimony. “I was abundantly clear that my channel was for educational purposes only. … Whether other individual investors bought the stock was irrelevant to my thesis.”
Gill also said that he first purchased GameStop stock, and later call options, in the summer of 2019, when the stock was trading around $5 apiece. He added to his position through the rest of the year and 2020, and testified that he believed “the market remains oblivious to GameStop’s unique opportunity.”
But even he didn’t believe it would hit a high of $483 a share in 2021.
“At the time I thought it was possible but a very low probability,” Gill testified.
Gill was a main character in the 2023 movie “Dumb Money” (played by actor Paul Dano), which portrays the events leading up to and during the GameStop short squeeze.
This story is developing and will be updated.
The-CNN-Wire
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