Early Market Surge: GameStop Soars More Than 37% After “Roaring Kitty’s” Return to Online Scene
GameStop stock rose by more than 37% before the market opened on Monday after “Roaring Kitty,” the mysterious figure behind the huge short squeeze of 2021, came back online for the first time in almost three years.
Roaring Kitty’s return on the X platform was marked by a symbolic picture of a focused video gamer pushing forward in their chair. This caused a lot of excitement. Not only did this post mark his return to the internet world, it was also his first activity on Reddit since 2021.
Keith Gill, who goes by the stage name Roaring Kitty and the Reddit username DeepF——Value, used to work as a marketer at Massachusetts Mutual Life Insurance and inspired a huge number of day traders in 2020 and 2021. They worked together to support GameStop and its call options, which set off a flurry of activity that shook the financial world.
GameStop’s rapid rise from $3 a share to over $120 a share, split-adjusted, in just three months showed how powerful individual investors can be when they work together against big hedge funds like Melvin Capital. Many people, including Melvin, lost a lot of money on their short positions and needed a lot of money to get through the storm.
As a result, Robinhood and other brokerages put limits on trading, which caused a lot of anger and legal fights. One class-action case against Robinhood was thrown out in August 2023, but Gill was still the target of another lawsuit that said Robinhood lied about his trading skills.
Because of how unstable GameStop’s situation was, Congress held hearings that shed light on how brokers work and how retail trading has become more like games. Notably, this all led to the 2023 movie “Dumb Money,” in which actor Paul Dano plays Gill’s part in the events of the past.
GameStop stock hit an all-time high of $120.75 an intraday in January 2021. This happened after the company split its stock 4 times for 1 in the summer of 2022. But as interest from individual investors faded, the company fell along with other meme stocks like AMC Entertainment Holdings. GameStop hit a terrible three-year low of $9.95 just last month.
Keith Gill may have become interested in the company again after recent price increases. GameStop finished Friday at $17.46, a huge 57% rise from the beginning of the month.
Even with these wins, GameStop’s most recent earnings report is not good news for the video game store. Late in March, the company said it was cutting jobs to save money because it had less money than expected in the fourth quarter because of tougher competition from online stores.
The company made $1.79 billion in the fourth quarter, which is a big drop from the $2.23 billion it made in the same quarter the previous year.
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