Shares rose dramatically on Monday after "Roaring Kitty," the inspiration for 2021's epic short film, posted online for the first time in nearly three years.
The post on X, a picture of a video gamer leaning forward in his chair as if to indicate that he was taking the game seriously, was Roaring Kitty's first post on the platform or Reddit. since 2021. The post garnered 63,000 likes in 13 hours.
GameStop last traded up 60% after rising as much as 110%. Trading in GameStop has been halted multiple times due to volatility. Another meme stock, AMC, was up 22% on Monday, while Reddit traded 13% higher. Roaring Kitty, whose legal name is Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance.
The "meme stock" frenzy involved individual investors targeting short sellers and hedge funds that were pessimistic about the outlook for GameStop and other companies, forcing them to close their short positions and drive up the prices of their target stocks. Currently, the short position in GameStop shares accounts for more than 24% of all its freely tradable shares, also known as publicly traded shares.
The poster child was Melvin Capital, the hedge fund that suffered massive losses as a result of heavy short selling in GameStop and became the target of an army of amateur traders, leading Ken Griffin's Citadel as well as Point72 to support Melvin's finances with close to $3 billion. .
The GameStop mania, which drove the stock from a low of $3 to over $120 in three months in early 2021, pushed brokers including Robinhood
To limit the trading of heavily shorted stocks. In response, a Robinhood user filed a class action lawsuit following the app's decision to restrict GameStop trading on its platform. The lawsuit was dismissed in August 2023.
Another class action lawsuit filed against Gill alleged that he acted like a novice trader despite being a licensed professional.
The surge led to a series of congressional hearings on the practices of brokers and the gamification of retail trading, and testimony from Gill as well as leaders of Robinhood, Melvin Capital, Reddit and Citadel.
