GameStop Shares Soar as 'Roaring Kitty' Returns, Reigniting Meme Stock Frenzy


The Return of Roaring Kitty: GameStop's Meme Stock Resurgence Shakes Wall Street

In a stunning turn of events, shares of videogame retailer GameStop skyrocketed nearly 75% on Monday following the return of "Roaring Kitty," a social media finance influencer credited with sparking the 2021 meme stock rally, to (formerly Twitter) after a three-year absence.

The surge in GameStop's stock price, which hit an 18-month high of $38.20, triggered multiple trading halts due to volatility and marked the company's most significant single-day percentage gain since January 2021. The rally also had a ripple effect on other meme stocks, with AMC Entertainment, Koss Corp, Hertz Global, and Reddit Inc all experiencing substantial gains.

Keith Gill, known as "Roaring Kitty" on YouTube and "DeepF***ingValue" on Reddit, played a pivotal role in the original Reddit rally, which saw GameStop shares surge up to 21-fold over a two-week period in January 2021 before crashing back to pre-surge levels. On Monday, the Roaring Kitty account posted cryptic movie clips from "The Avengers," "Tombstone," and "Ferris Bueller's Day Off," without mentioning GameStop directly.

Despite the renewed interest in GameStop, some market experts remain cautious. Art Hogan, chief market strategist at B Riley Wealth, warned against characterizing the participants in this phenomenon as investors, noting that there has been no fundamental change in the companies popularized by the meme stock frenzy.

GameStop has faced challenges in recent months, cutting jobs to reduce costs and reporting lower fourth-quarter revenue. The company's total store count has decreased from 4,413 in January last year to 4,169 as of February 3. However, the stock's market value has surged to roughly $9 billion, although still far below its 2021 peak of about $37 billion.

Analysts attribute the unlikely recurrence of the meme stock mania to the unique circumstances of the 2021 rally, when many individuals were stuck at home with extra money to invest. Short sellers, who bet against GameStop, are set to lose $1.23 billion on paper due to Monday's surge, according to analytics firm Ortex.

The GameStop saga has captured the attention of Hollywood, inspiring Craig Gillespie's 2023 movie "Dumb Money." As the meme stock frenzy reignites, it remains to be seen whether this resurgence will have the same impact as the original rally or if it will be a short-lived phenomenon in the ever-evolving world of finance and social media.