A man passes by a GameStop location on 6th Avenue in New York, March 23, 2021.
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GameStop shares rallied more than 36% in the premarket Monday after “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, posted online for the first time in roughly three years.
The post, a picture on X of a video gamer leaning forward on their chair as to indicate he’s taking the game seriously, marked Roaring Kitty’s first post on the platform — or on Reddit— since 2021.
Kitty, whose legal name is Keith Gill, is one of the Reddit traders who drove the meme stock craze of 2021. Gill, who goes by DeepF——Value on Reddit, attracted an army of day traders who cheered each other on and piled into the brick-and-mortar video game stock and call options between 2020 and 2021. Gill was a former marketer for Massachusetts Mutual Life Insurance.
Hedge fund Melvin Capital became a target of the army of amateur traders and suffered huge losses that prompted the Hedge fund arm of Citadel, as well as Point72, to infuse close to $3 billion into Melvin to backstop its finances.
The eye-dropping mania once forced brokerages including Robinhood to limit trading in heavily shorted stocks as it blew up their clearinghouse margin. A Robinhood user filed a class-action lawsuit following the app’s decision to restrict GameStop trading on its platform. Robinhood won the dismissal of this lawsuit in August 2023.
There was another class-action lawsuit brought against Gill, alleging that he pretended to be a novice trader despite being a licensed professional.
The volatility also spawned a series of Congressional hearings around brokers’ practices and gamifying retail trading, which involved the leaders of Robinhood, Melvin Capital, Reddit, Citadel as well as Gill. The history-making episode inspired 2023 movie “Dumb Money,” in which Paul Dano played Gill.
GME 5-year chart
In January 2021, shares hit an all-time intraday high of $120.75 per share. As retail interest faded the stock collapsed, along with other meme stocks like AMC. The shares last month hit a three-year low of $9.95.
Recently, the stock has started to move higher again, which may have rekindled the trader’s interest. The stock is up 57% so far in May and closed Friday at $17.46.
However, GameStop’s most recent earnings report showed a discouraging picture at the video game company. In late March, the firm said it had cut an unspecified number of jobs to reduce costs and reported lower fourth-quarter revenue amid rising competition from e-commerce firms.
GameStop posted revenue of $1.79 billion for the fourth quarter, compared with $2.23 billion in the same quarter a year earlier.
