GameStop Surge Tied to Roaring Kitty’s Social Media Comeback

The surprise social media return of a trader, credited with igniting the meme stock frenzy earlier this year, sent GameStop shares skyrocketing on Monday. While the surge had nothing to do with the struggling company’s fundamentals, it was closely tied to a meme shared by the trader known as Roaring Kitty on social media platform X.

Shares Surge and Caught in Volatility

GameStop’s stock surged by an impressive 74% on Monday, immediately after Roaring Kitty shared the meme. The earlier in the day, the shares skyrocketed by over 110% and trading had to be halted multiple times due to volatility. Notably, short sellers incurred approximately $1 billion in mark-to-market losses as their bets against GameStop failed.

Meme Stocks on the Rise

The surge in GameStop shares also sparked a 78% increase in the stocks of cinema chain AMC Entertainment and approximately 9% rise in shares of Reddit. Even shares of the trading platform Robinhood Markets, which recently suspended purchases of GameStop and other meme stocks, saw an increase of 4%.

The Meaning Behind the Meme

The viral meme, shared by Roaring Kitty, depicts a man leaning forward in a chair with a video game console in hand. While GameStop had previously posted a similar cartoon with a blue arrow and chair, Roaring Kitty substituted them with red, creating a symbolic representation of “when things get serious.”This interpretation is derived from the popular internet meme culture.

According to Know Your Meme, the image has gained traction within the community and the underlying message has resonated with traders.

Statement from Roaring Kitty

Although Roaring Kitty, whose real name is Keith Gill, has not responded to CNN’s request for comment, in a 2021 Congressional hearing on the GameStop frenzy, Gill described himself as a casual daytime trader who did not intend to feed the frenzy but rather viewed GameStop as an attractive investment opportunity.

Gill firmly denies the claims of using social media to deceive unsuspecting investors. He emphasized that his aim was to be educational and the decisions of other individual investors did not impact his investment thesis.

Notably, Gill’s initial purchases of GameStop stock and call options occurred in 2019 when the shares were trading at around $5. He continued building his position throughout 2020, strongly believing in the long-term opportunity presented by GameStop, even though he did not anticipate its share price reaching $483 in 2021.

The Meme Stock Phenomenon

GameStop’s meteoric rise is part of a larger phenomenon that led to the surge of other meme stocks such as AMC Entertainment and Bed Bath & Beyond. These stocks are often driven by the collective actions and sentiment within online trader communities rather than traditional fundamental factors.

About Roaring Kitty

Roaring Kitty (Keith Gill) gained wide recognition as one of the key figures in the GameStop saga. The events revolving around the GameStop short squeeze became the inspiration for the 2023 movie “Dumb Money,” in which Gill is portrayed by actor Paul Dano.

Temporary Trading Halts

GameStop’s surge triggered several temporary circuit breakers, imposed to allow investors to recalibrate during periods of excessive market volatility. However, Robinhood spokesperson Anupriya Ghate confirmed that the platform did not halt the purchase of GameStop shares. Market-wide halts were a response to the overall volatility and not specific to Robinhood alone.

As stocks settle after the trading day, levels might change slightly.