Is the memestock craze back? Judging from GameStop’s (NYSE: GME) share price it certainly seems so. Shares in the video game company rocketed 110 percent early on Monday to trade at $36.70 before falling to $30 later on.
The move came after “Roaring Kitty,” the man behind the boom in memestocks in January 2021 posted an image on X of a man leaning forward in a chair, the first time he’s posted since June 2021. What does it mean? No idea. But it’s certainly created excitement among the retail investor community, generating over 18 million views and 24,000 reposts at the time of writing.
Trading in the stock was halted five times on Monday due to volatility and the share price of other memestocks has also jumped. AMC, a cinema company, was up 22 percent while Reddit, a key platform in the memestock movement of 2021, increased 17 percent.
Activity on the WallStreetBets subreddit has unsurprisingly exploded too. Many users are posting the gains they have made from the increase in GameStop’s share price and some are telling others to buy the stock.
Roaring Kitty, also known as “DeepF***ingValue” on Reddit, is actually Keith Gill, a former marketer for Massachusetts Mutual Life Insurance called. He created a massive following of retail investors in 2021 and was perceived to be fighting against the establishment by investing in GameStop, a company whose stock was massively shorted by hedge funds. THe story became the subject of a Netflix documentary and a 2023 film called Dumb Money.
Gill also posted a video of the Marvel universe super villain Thanos and Wolverine from the X-Men on Monday morning as the stock was rising. Again, no one’s really sure what this means but the video had nearly 6,000 reposts and 300,000 views just 10 minutes after it was published.
Short sellers, those who make money when the price of a stock goes down, had already lost over $1.4 billion on Monday morning. Ihor Dusaniwsky, managing director of predictive analytics at trading firm, S3, said “expect new short sellers to jump into this trade as GME stock prices around or above the $30 level will be attractive entry points for new short selling… Short sellers may be in for a bumpy and bloody ride in these stocks”
After Monday’s jump, the company is now worth $9.1 billion despite generating just $5.2 billion of revenue in fiscal 2024, 11 percent less than in 2022.
Whether that’s a good or bad thing for the average person remains to be seen, a lot of people unfortunately lost money during the previous memestock craze. But whether you’re a seasoned investor or just a casual observer, his return is hard to ignore.
