Summarize

Simplifying... Inshort

GameStop's stock skyrocketed by 74% following the return of Keith Gill, a key figure in the 2021 GameStop rally, to social media.
This surge also boosted other "meme" stocks like AMC by 78%.
The market volatility caused by this surge led to trading halts and a decrease in short positions against GameStop.
Despite his influence, Gill maintains his actions were not intended to manipulate the market, but rather he simply liked the stock.

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GameStop shares surge following "Roaring Kitty" return

GameStop shares soar 74% after Keith Gill's social media return

By Dwaipayan Roy

May 14, 2024

12:27 pm

What's the story

GameStop shares soared 74%, following the return of Keith Gill, also called "Roaring Kitty," to social media. This marked the largest intraday climb since the 2021 meme stock frenzy. Gill arrived online after three years, and shared a meme on X denoting heightened gamer attention. He followed this up with a YouTube video, where he said, "That's all for now cuz I'm out of breath. Here's a quick 4-minute video I put together to summarize the $GME bull case."

Meme frenzy

Gill's return sparks resurgence in meme stocks

Gill's return to social media, led to GameStop shares more than doubling at market opening and closing the day up 74%. This spike also had a ripple effect on other meme shares like AMC, which saw a 78% increase. In 2021, Gill and other retail investors triggered a massive rally by buying GameStop stock, leading to a "short squeeze" where short sellers were forced to buy stocks at rising prices to mitigate losses.

Impact

Trading halted amid extreme volatility, AMC shares boosted

The resurgence in GameStop shares led to extreme market volatility, resulting in trading being halted eight times. This grassroots movement, initiated on the Reddit forum Wallstreetbets, had previously driven GameStop's share from below $20 to nearly $400. The phenomenon created a David v/s Goliath scenario against large hedge funds betting against GameStop, and caused estimated losses of around $5 billion for major hedge funds such as Citron Research and Melvin Capital.

Market shift

Gill's influence remains potent, short positions decrease

Despite stepping away from public forums after a 2021 video, Gill's influence remains strong in the stock market. Interest in meme shares had been rejuvenating earlier this month, with GameStop and AMC clocking significant gains. Short positions against GameStop have decreased from over 140% of tradable stocks in 2021 to just over 24% now. Despite profiting from the rise, Gill testified in a Congressional hearing that he did not aim to manipulate the share price, but simply liked the stock.