What is fueling the surge of meme stocks like GameStop and AMC recently, including the comeback of ‘Roaring Kitty’ on social media?

What is fueling the surge of meme stocks like GameStop and AMC recently, including the comeback of 'Roaring Kitty' on social media?

GameStop Soars After ‘Roaring Kitty’ Resurfaces

GameStop, the video game retailer at the heart of the meme stock craze of 2021, has once again become a hot topic on social media after Keith Gill, known as “Roaring Kitty,” resurfaced with an enigmatic X post on Sunday, May 13. Gill’s return, after nearly three years of silence, has sparked excitement among retail investors and sent GameStop shares soaring.

The Return of the Meme Stock King

Keith Gill, a former insurance marketer, became a cult figure during the GameStop short squeeze saga of January 2021. His bullish analyses of the struggling retailer’s stock, shared on X and YouTube, helped fuel a surge in its share price, causing major losses for hedge funds that had bet against the company.

Gill, who has since become known as Roaring Kitty, disappeared from social media shortly after his appearance before the House Financial Services Committee in February 2021. His cryptic X post, simply showing a sketch of a man leaning forward in a chair, has left many wondering about its significance.

R/WallStreetBets Goes Wild

Gill’s return has sent the Reddit forum r/wallstreetbets, a hub for retail investors who played a key role in the GameStop frenzy, into a frenzy. One post about Gill had over 1,700 comments, with users joking that his return was akin to “the prophecy fulfilled.” The forum’s official X account also posted a message welcoming Gill back.

GameStop Shares Surge

GameStop shares have responded positively to Gill’s return. In premarket trading on Monday, the stock jumped over 38%, adding billions of dollars to the company’s value. If the surge continues until the opening bell, GameStop’s stock could see its biggest one-day gain since January 2021.

Other Meme Stocks Benefit

GameStop’s resurgence has also had a positive impact on other meme stocks. AMC Entertainment, another company popular with retail investors, saw its shares jump over 11% in premarket trading. Bed Bath & Beyond, a home goods retailer that has also attracted attention from meme stock traders, was up over 6%.

Factors Behind the Surge

  • Roaring Kitty’s return: Gill’s resurfacing has reignited excitement among retail investors who believe he has a knack for spotting undervalued stocks.
  • Nostalgia for meme stocks: The rise in meme stocks like GameStop evokes memories of the frenzy that gripped Wall Street in 2021.
  • Short interest: GameStop still has a significant amount of short interest, meaning that hedge funds are betting against the company. This creates the potential for another short squeeze.

Caution Advised

While the surge in meme stocks is exciting, it’s important to invest cautiously. These stocks are highly volatile and can experience sharp swings in price. Investors should do their own research and only invest what they can afford to lose.

also read:GameStop’s Selective Strategy in the Pokémon Card Craze: Only Accepting PSA-Graded Cards

By Mehek

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