A man walks past a GameStop location on 6th Avenue in New York on March 23, 2021.
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GameStop shares rose more than 37% in Monday’s premarket after “Roaring Kitty” was posted for the first time in nearly three years.
posta photo of a video gamer leaning forward in a chair to show he’s serious about the game, marked Roaring Kitty’s first post on the platform, or Reddit, since 2021.
Kitty’s real name is Keith Gill, and she’s one of the Reddit traders who led the meme stock boom of 2021. Gil is referred to as DeepF——Value on Reddit. The trader helped garner retail interest by facilitating massive short squeezes in brick-and-mortar video game stocks and call options in 2020 and 2021.
Gill is a former marketing executive for Massachusetts Mutual Life Insurance. Through YouTube videos and posts on Reddit, Mr. Gill encouraged a group of retail traders to squeeze hedge funds shorting GameStop.
Hedge fund Melvin Capital was targeted by an army of amateur traders and suffered huge losses, so Citadel’s hedge fund arm and Point72 injected Melvin with nearly $3 billion to shore up its finances.
In the past, this alarming mania has forced brokerages such as Robinhood to restrict trading in heavily shorted stocks as clearing house margins have skyrocketed. Robinhood users have filed a class action lawsuit following the app’s decision to restrict GameStop trading on its platform. Robinhood won the lawsuit dismissed in August 2023.
The volatility also triggered a series of congressional hearings on broker practices and the gamification of retail trading, which included not only Gill but also leaders from Robinhood, Melvin Capital, Reddit, and Citadel.
In January 2021, the stock hit an intraday high of $120.75 per share. As interest in retail waned, the stock, along with other meme stocks like AMC, crashed. The stock hit a three-year low of $9.95 last month.
See chart…
GME 5 year chart
Recently, the stock price has started to rise again, which may be reigniting interest from traders. The stock is up 57% so far in May and closed at $17.46 on Friday.
