By Medha Singh and Pranav Kashyap
(Reuters) – Shares of video game retailer GameStop jumped more than 100% at one point on Monday after “Roaring Kitty,” a former insurance company marketer credited with sparking the stock rally meme of 2021, returned to X.com after three years. social media disruption.
Keith Gill, known as “Roaring Kitty” on YouTube and “DeepF***ingValue” on Reddit, was a key figure in the so-called Reddit rally, which saw GameStop shares rise as much as 21 times in two weeks. January 2021, before falling back to pre-outbreak levels in the following days.
Gill posted a sketch on Sunday of a man leaning forward in a chair, a popular meme among gamers that indicates things are getting serious. This is his first post on X, previously Twitter, after having been notably absent from social media platforms since mid-2021.
“Roaring Kitty” did not immediately respond to a Reuters request for comment.
GameStop stock hit its highest level in a year on Monday and was trending on investor-focused social media stocktwits.com, indicating interest from individual investors. Roaring Kitty and retail trading platform Robinhood were trending on X.com.
Roaring Kitty “seems to be the most likely suspect for the surge in interest today…but I would be careful not to characterize participants in this phenomenon as investors,” said Art Hogan, chief market strategist at B Riley Wealth.
“There is no fundamental change in any of the businesses popularized by this phenomenon.”
GameStop cut an unspecified number of jobs in March to cut costs and reported a decline in fourth-quarter revenue.
The company has about a quarter of its publicly available shares shorted and bearish investors are expected to lose $437 million on paper Monday, analytics firm Ortex said.
Short sellers typically borrow shares to sell them and make a profit by buying them back later when the price falls. As of Monday, no GameStop shares were available for borrowing on the Interactive Brokers trading platform, a Berlin-based trader confirmed.
Shares of the struggling video game retailer have surged more than 57% so far in May, but still remain about 80% below the 2021 high.
“You’re unlikely to see a repeat of the meme stock craze for an extended period of time, because the conditions are different. There was a time when a bunch of people were stuck at home with free money and nothing to do and that’s no longer the case,” said Thomas Hayes, president of Great Hill Capital LLC.
The meme stock rally in 2021 was sparked by Gill’s posts on Reddit’s Wallstreetbets discussion group about the gains he had made on his investments in the heavily shorted company that sparked renewed interest in GameStop.
The rally extended to heavily shorted stocks, including AMC, as Reddit users banded together to squeeze hedge funds that had bet against GameStop and other companies.
The battle between Wall Street and Main Street has also given rise to US regulatory scrutiny, in which Gill has been summoned to testify before the US Congress alongside US hedge fund managers.
It also inspired the Craig Gillespie film “Dumb Money,” released last year.
(Reporting by Medha Singh in Bengaluru; additional reporting by Pranav Kashyap, Sruthi Shankar, Akash Sriram and Shristi Achar; editing by Shinjini Ganguli)
News Source : finance.yahoo.com
Gn bussni
