The individual central to the meme stock craze during the pandemic made a rare online appearance after three years, causing a sharp increase in the prices of the quirky and volatile shares on Monday.
Keith Gill, also known as “Roaring Kitty,” shared an image on the social platform X on Sunday, depicting a man sitting forward in his chair, a meme often used by gamers to signify a serious moment. He followed this with a YouTube video from years ago, where he supported the struggling company GameStop, stating, “That’s all for now cuz I’m out of breath. FYI here’s a quick 4-minute video I put together to summarize the $GME bull case.”
In 2021, GameStop, a video game retailer, faced challenges as consumers rapidly shifted from physical discs to digital downloads. Large Wall Street hedge funds and investors were betting against the company, or shorting its stock, anticipating its shares would continue to decline significantly.
Gill and his supporters changed the trajectory of GameStop, which seemed destined for bankruptcy, by purchasing thousands of its shares against the prevailing indicators suggesting the company was in serious trouble.
This move triggered a “short squeeze,” forcing the big investors who had bet against GameStop to buy its rapidly rising stock to cover their substantial losses. At Monday's opening bell, it appeared Gill had reignited this phenomenon, with GameStop shares more than doubling and closing up 74%. This marked the largest intraday trading surge for GameStop since the meme craze of early 2021, also lifting other meme stocks like AMC.
Trading in GameStop was halted eight times before noon on Monday due to the extreme volatility.
In 2021, Gill became a prominent figure after his posts on the Reddit forum Wallstreetbets sparked a battle between small investors and large hedge funds betting against GameStop's survival.
The small investors, at least temporarily, emerged victorious, driving GameStop shares up over 1,000% in 2021, along with other meme stocks like AMC, which surged 2,300% in a short period.
Some major traders incurred massive losses as GameStop soared from under $20 to nearly $400 per share. Hedge funds such as Citron Research and Melvin Capital lost an estimated $5 billion, according to analytics firm S3 Partners. Some smaller investors believed Ryan Cohen, co-founder of Chewy.com, could steer GameStop toward online retail success. Cohen acquired a stake in GameStop before joining its board and later becoming CEO.
Joining GameStop in Monday's surge was AMC Entertainment Holdings Inc., which jumped 78%. Koss Corp., a headphone manufacturer, spiked 37%, while BlackBerry, once a leading smartphone maker, rose 7%. Retailer Bed, Bath & Beyond, another meme stock, filed for bankruptcy protection last year.
Some meme stocks, including GameStop and AMC, had been climbing earlier this month at a rapid pace.
GameStop's shares, which had been declining steadily since 2021, had already risen by 57% this month. In January, GameStop reported its first annual profit since 2018, though it remains uncertain if Cohen's turnaround plan will succeed. AMC Entertainment Holdings Inc. had risen 10% over the past 30 days.
These companies broke out on Monday following Gill's tweet.
However, the market dynamics for companies like GameStop have shifted. When Gill and retail investors started buying GameStop shares, more than 140% of the company's tradeable shares were shorted. This skewed figure resulted from some traders borrowing against already shorted stocks to make even larger bets against the company, significantly increasing their losses as the stock price rose.
The short positions against GameStop's tradeable shares now stand just over 24%, slightly higher than the 22.5% recorded in January.
While Gill made a significant profit investing in a troubled video game company, he denied using social media to drive up GameStop's stock price during a virtual appearance at a Congressional hearing, simply stating, “I like the stock.”
As Roaring Kitty, Gill disappeared from messaging boards after posting a video in June 2021 of kittens falling asleep.