GameStop shares have surged by more than 37% on Monday after “Roaring Kitty,” the man who precipitated the short squeeze of 2021 posted online for the first time after a long hiatus of three years.
GameStop Stock Skyrockets 75% After ‘Roaring Kitty’ New Post
It was the first post of Roaring Kitty on the platform — or on Reddit— since 2021. The post is a picture of a video gamer leaning forward on their chair on X which shows that he is deeply engrossed in the game.
Roaring Kitty a.k.a. Keith Gill, was a former marketer for Massachusetts Mutual Life Insurance. Gill, who was known by the name DeepF——Value on Reddit, spawned an army of day traders who encouraged each other on and dived into the brick-and-mortar video game stock and call options between 2020 and 2021.
The biggest casualty of the army of amateur traders was Hedge fund Melvin Capital, which was heavily shorting GameStop. Consequently Melvin Capital suffered massive losses and this prompted the hedge fund arm of Citadel, as well as Point72, to infuse close to $3 billion into Melvin to backstop its finances.
The ground-shattering mania also forced brokerages including Robinhood to reduce trading in heavily shorted stocks as it blew up their clearinghouse margin.
A Robinhood user even filed a class-action lawsuit after Robinhood decided to limit GameStop trading on its platform. Robinhood won the dismissal of this lawsuit in August 2023.
A class action lawsuit has also been initiated against Roaring Kitty a.k.a. Keith Gill who alleged that he impersonated a greenhorn investor while the reality was that he was an experienced and licensed professional
The l’affaire “Roaring Kitty,” and the extreme volatility it spawned led to the institution of a series of Congressional hearings around brokers’ practices and conducting retail trading as a game, which involved the leaders of Robinhood, Melvin Capital, Reddit, Citadel as well as Gill. The incident also turned out to be the inspiration for the 2023 movie “Dumb Money,” in which Paul Dano played Gill.
Going back to history in January 2021 GameStop hit an all-time intraday high of $120.75 per share and it led to GameStop announcing a 4-for-1 stock split in July 2022. However, as retail interest declined the stocks tanked along with other meme stocks like AMC.
The shares last month hit a three-year low of $9.95. However, of late the stocks have started surging and it has rekindled trader’s interest.
The stock is up 75% so far in May.
