Shares in GameStop soared nearly 73% in pre-market trading on Monday, propelled by a significant purchase from meme stock influencer Keith Gill, also known as “Roaring Kitty.” Gill, whose Reddit account had been dormant for over three years, disclosed in a Reddit post his acquisition of $116 million worth of GameStop stock. This revelation reignited enthusiasm for meme stocks, which derive their value more from popularity than from traditional business fundamentals.
The phenomenon of meme stocks gained widespread attention in 2021 when social media buzz, notably originating from the WallStreetBets subreddit, triggered sharp increases in the stock prices of companies like GameStop, AMC Entertainment, and Bed Bath & Beyond. These stocks are prone to volatile fluctuations driven primarily by online discussions among retail investors rather than by the financial performance of the companies involved.
Alongside the surge in GameStop’s stock price, shares of AMC Entertainment also experienced a significant uptick of nearly 28% early Monday morning. This resurgence in meme stocks follows another recent surge fueled by Gill, who posted a meme on X (formerly Twitter) last month, prompting a rapid increase in GameStop’s stock value. The meme depicted a man holding a video game console, hinting at a forthcoming surge in stock activity.
Gill, a prominent figure within the WallStreetBets community, played a central role in the 2021 GameStop frenzy. Retail investors rallied against short-sellers who had bet against GameStop, resulting in substantial losses for those betting on the stock’s decline. Short-sellers typically profit by borrowing shares, selling them, and repurchasing them at a lower price to return them.
In 2021, Gill testified before the US Congress, portraying himself as a casual daytime trader. He maintained that his intention was not to fuel the frenzy but rather to view GameStop as an attractive investment opportunity. His recent actions indicate his continued confidence in the stock’s potential.
The renewed interest in GameStop and other meme stocks underscores the enduring impact of social media on financial markets. Despite the speculative nature of these investments, retail investors remain deeply engaged, exerting considerable influence on market dynamics based on online sentiment and discussions.
As of Monday, the excitement surrounding Gill’s substantial investment and his resurgence on social media platforms has revitalized the meme stock phenomenon, emphasizing the significant role of individual influencers in shaping market trends.
