GameStop Shares Go Up By 37% After Roaring Kitty Makes A Comeback

Gamestop - Roaring Kitty

GameStop shares surged over 37% in premarket trading on Monday following a rare online appearance by “Roaring Kitty,” the figure behind the notable short squeeze of 2021.

This online post, depicting a gamer leaning forward intently in their chair, marked Roaring Kitty’s first engagement on the platform or Reddit in about three years.

Formerly known as Keith Gill, Roaring Kitty worked as a marketer for Massachusetts Mutual Life Insurance.

Under the moniker DeepF——Value on Reddit, Gill garnered a following of day traders who rallied around the brick-and-mortar video game stock, GameStop, and its call options between 2020 and 2021.

During this time, hedge fund Melvin Capital, heavily shorting GameStop, faced significant losses, becoming a prime target for the army of amateur traders. To stabilize its finances, Melvin received nearly $3 billion in support from the hedge fund arm of Citadel and Point72.

GameStop Company

The frenzy led to brokerages like Robinhood restricting trading in heavily shorted stocks, due to the strain on their clearinghouse margin. Robinhood faced a class-action lawsuit from a user following its decision to limit GameStop trading, a case dismissed in August 2023.

Another class-action lawsuit targeted Gill, alleging that he misrepresented himself as an inexperienced trader despite his professional licensure.

The market volatility prompted Congressional hearings on brokers’ practices and the gamification of retail trading, involving key figures such as Robinhood’s leadership, Melvin Capital, Reddit, Citadel, and Gill. This historical event inspired the 2023 movie “Dumb Money,” featuring Paul Dano portraying Gill.

While GameStop shares reached a record intraday high of $120.75 per share (split adjusted) in January 2021, the company announced a 4-for-1 stock split in July 2022.

Gamestop – Roaring Kitty

As retail interest waned, the stock, along with other meme stocks like AMC, plummeted. Last month, GameStop shares hit a three-year low of $9.95.

However, there has been a recent resurgence in the stock’s movement, potentially reigniting trader interest. The stock has surged 57% in May so far, closing at $17.46 on Friday.

Nevertheless, GameStop’s most recent earnings report painted a bleak picture for the video game company.

In late March, the firm disclosed job cuts to trim costs and reported lower fourth-quarter revenue amidst heightened competition from e-commerce firms. Fourth-quarter revenue stood at $1.79 billion, down from $2.23 billion in the same period a year earlier.

Ethan Johnson
Ethan's journey into journalism began with a deep curiosity about how businesses operate and evolve in today's dynamic markets. Armed with a degree in Journalism from a prestigious university, he embarked on his career, initially covering local business developments before expanding his scope to national and international commerce news.