Meme stocks vie for an encore

GameStop shares surged ~74% yesterday after Keith Gill, the man best known for driving the meme stock mania of 2021 under the name Roaring Kitty, came back onto social media after a three-year hiatus. As of writing, the X post has attracted more than 19 million views.

  • Roaring Kitty shared a sketch of a seated man leaning forward with what looked like a gaming controller, an image some traders interpreted as a sign he is back in action.

Catch-up: In 2021, Roaring Kitty used social media and Reddit’s r/wallstreetbets to encourage millions of amateur traders to buy GameStop in an effort to squeeze the hedge funds that had aggressively bet against the company and others like it. 

  • The rally pushed the stock’s price from under US$3 to a high of $483 in January 2021, but shares have lost about three-quarters of their value since that peak.

  • According to data from S3 Partners, GameStop short sellers had lost roughly $1 billion on the day and are down $1.43 billion this month alone. 

Why it matters: The GameStop surge is part of a broader rally this month of meme stocks like AMC Entertainment and Bed Bath & Beyond. How long this one lasts is anyone's guess, but one expert points out that previous attempts to replicate the 2021 meme stock craze have fallen flat.—LA