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GameStop, AMC stocks surge as Roaring Kitty returns

The man at the center of the pandemic stock craze appeared online for the first time in three years, sending the prices of these quirky and volatile stocks sharply higher on Monday.

Keith Gill, better known as “Roaring Kitty”, posted an image on the social platform X on Sunday of a man sitting forward in his chaira meme used by gamers when things get serious.

He followed that tweet with a YouTube video from years ago in which he defended the embattled company GameStop, saying, “That’s it for now because I’m at my wit’s end.” For your information, here is a short 4 minute video that I made to summarize the $GME bull case.

Stoppage of play in 2021, it was a video game retailer struggling to survive as consumers quickly switched from discs to digital downloads. Large Wall Street hedge funds and major investors were betting against him, or selling his shares short, believing that his shares would continue on a drastic downward trend.

Gill and those who agreed with him changed the trajectory of a company that seemed headed for bankruptcy by buying back thousands of GameStop shares in the face of almost every accepted metric that told investors the company was in trouble. serious difficulty.

That triggered what’s known as a “short squeeze,” when large investors who had bet against GameStop were forced to buy its rapidly rising shares to offset their massive losses.

At the opening bell on Monday, it appeared that Gill had reignited the phenomenon as GameStop shares more than doubled. They closed Monday up 74%. This is the biggest surge in intraday trading for GameStop since the meme craze of early 2021. Other meme stocks like movie theater chain AMC have also been jolted higher.

Trading on GameStop was halted eight times before noon Monday due to volatility.

Gill became a cause celebre in 2021 after his posts on the Reddit Wallstreetbets subcategory sparked a David versus Goliath battle with large hedge funds betting heavily against GameStop’s survival.

The little guys won, at least for a while, sending shares of GameStop up more than 1,000% in 2021 along with other meme stocks. The struggling movie theater chain AMC jumped 2,300% in a very short period of time that same year.

Some big traders saw colossal losses as GameStop went from less than $20 to almost $400 each. Citron Research, Melvin Capital and other well-known hedge funds lost around $5 billionaccording to analytics firm S3 Partners.

Some of these new, smaller investors believed, at least in part, that Ryan Cohen, co-founder of Chewy.com, could push the traditional retailer in a more online direction. Cohen acquired a stake in GameStop before eventually joining the board and last year become its CEO.

AMC Entertainment Holdings Inc. joined the meme wave Monday, which jumped 78%. Koss Corp., a headset maker, soared 37% and BlackBerry, the formerly dominant 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 climbed earlier this month, and quickly.

Shares of GameStop Corp., in steady decline since 2021, were already up 57% this month. In January, GameStop reported its first annual profit since 2018, although it remains unclear whether Cohen’s turnaround plan will succeed.

AMC Entertainment Holdings Inc. is up 10% over the past 30 days.

These companies broke up on Monday following Gill’s tweet.

The market dynamics when it comes to companies like GameStop have changed, however.

When Gill and an army of online retail investors began buying GameStop stock, more than 140% of the company’s tradable shares were shorted. You arrive at this distorted number because some traders were borrowing against already shorted stocks to build even bigger bets against the company, greatly increasing their losses when the shares began to rise.

Short positions in GameStop’s tradable shares now stand at just over 24%, slightly higher than the 22.5% recorded in January.

Gill reaped big profits by investing in a struggling video game company, but denied it when he appeared virtually at a congressional hearing that he used social media to drive up GameStop’s stock price.

He simply told lawmakers at the time, “I like the title.”

As Roaring Kitty, Gill had disappeared from messaging forums after posting a video in June 2021 of the kittens are going to sleep.

The story of Roaring Kitty and the meme stock craze was made into a film last year, titled “Dumb Money.”

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News Source : apnews.com

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