Shares in video game retailer GameStop surged as much as 118% on Monday after meme stock investor "Roaring Kitty" posted a cryptic image on X, his first post in about three years.
Roaring Kitty is the online screen name of investor Keith Gill, who became instrumental in creating a trading frenzy behind GameStop and movie theater chain AMC, leading to massive rallies in those stocks in 2021.
On Sunday, Gill re-emerged to post a picture of a person who leans forward while gripping a game controller.
The image is known as a meme that suggests things are starting to get "serious." It was the first posting on X by Roaring Kitty since June 2021.
The stock price shot up even before the market opened and got so volatile that trading was halted several times. Shares ended up 74%.
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
For many investors it was a reminder of the meme stock mania that gripped markets in 2021, when the pandemic left many people around the world confined at home.
GameStop had already been having a bit of a comeback this month: Shares were up 57% this month as of the end of last week, before shares rallied again on Monday.
'A form of entertainment'
Gill became a day trader after previously working for the Massachusetts Mutual Life Insurance Co, or MassMutual. During the pandemic, he and other amateur investors banded together in Reddit groups like wallstreetbets to buy stocks of companies such as GameStop, AMC and retailer Bed Bath & Beyond to the bafflement of professional investors in Wall Street.
Often these amateur investors would buy up shares in companies that some professional investors were betting against.
Prof. James Angel, a finance professor at Georgetown University warned about the risks of meme stocks for amateur investors, calling them "a form of entertainment."
Meme stocks tend to consist of companies that "had a lot of trouble and they're usually very volatile," Angel added.
GameStop is in the midst of attempting a turnaround after seeing sales decline as more people have migrated to online games.
The retailer continues to focus on increasing online sales and cutting costs.
