GameStop stock soared Thursday following a cryptic post from meme stock influencer Keith Gill. Mr. Gill shot to fame with his online persona and bullish bets on video game retailers that sparked a trading frenzy among mother-and-son investors.
Gil Posted A photo and computer screen resembling a 2006 Time magazine cover was posted on social media platform X. Following his post, GameStop stock soared, trading as high as $30.87. The stock rose 6% to close at $28.63.
Gill, known as “Roaring Kitty” on YouTube and “DeepF***ingValue” on Reddit's popular WallStreetBets, is a central figure in the so-called “Reddit Rally,” which saw GameStop stock soar 1,600% at one point in January 2021. It was. It destroyed a hedge fund that had bet on video game retailers.
Steve Sosnick, chief strategist at Interactive Brokers, said this is characteristic of the pattern that evolved in GameStop trading. Gill's Roaring Kitty persona tends to emerge when stocks rise and then calm down or retreat a bit, he said. Featured in social media posts.
“We've seen that pattern again recently. The stock price went from $21 at the beginning of November to around $30 around Thanksgiving, but most of that gain has been given back in the last few days. It was just that.”
By 2:14 p.m. Thursday, about 300,000 GameStop options contracts had changed hands at about 1.5 times the normal rate, according to data from options analysis firm Trade Alert.
The stock's 30-day implied volatility (how much traders expect the stock price to fluctuate in the short term) is 132%, a three-week high, from 93% in the previous session, according to the data. rose.
Contracts betting that the stock price will close above $30 by Friday were the most actively traded, with about 32,000 of them traded by late afternoon.
“Animal spirits”
After a three-year hiatus, Gill resurfaced on social media in early 2024 and was flooded with excited messages from followers, many of whom pitted the social media phenomenon against Wall Street's Goliath and won. I compared it to David.
“The reemergence of meme stocks tends to follow market enthusiasm and a general resurgence of animal spirits,” said Art Hogan, market strategist at B. Riley Wealth Management. “When markets are at or near all-time highs, the speculative side of stocks tends to come back.”
Meme stocks' rally in 2021 was sparked by Gill posting on the WallStreetBets subreddit about the profits he made investing in the heavily shorted company.
The rally also added to other short-sold stocks, including AMC Entertainment, as Reddit users banded together to squeeze bearish hedge funds, costing them billions of dollars and drawing scrutiny from U.S. regulators. It spread.
The entire episode served as the inspiration for director Craig Gillespie's 2023 film Dumb Money.
Other so-called meme stocks also rose Thursday in response to Gill's post. Shares of Unity Software closed up 5%, while movie theater chain AMC, another favorite of retail investors starting in 2021, rose 6%.
“I wouldn't be surprised if the believers weren't distracted by other things. Cryptocurrency stole GameStop's thunder recently,” Sosnick said.
The video game retailer's stock is up about 76% since the beginning of the year. Meanwhile, Bitcoin soared more than 130% early Thursday, boosted by optimism over easing regulatory headwinds, an astonishing rally for the world's largest cryptocurrency, pushing it above the $100,000 mark. Exceeded.
