Hello Kitty
It only took a single vague post on X by day trader Keith Gill, better known as Roaring Kitty, to light a fire under memestocks such as GameStop that have seen little action since the 2021 rush.
The gaming industry is not enjoying its finest hour. Microsoft is shutting down Xbox gaming divisions, Sony’s big PlayStation game for the first half of the year has underperformed and Nintendo is in a lull as it prepares its next console.
GameStop, however, has just hit an unexpected purple patch.
The gaming retail chain’s stock nearly doubled in one trading session following the return of the enigmatic Keith Gill, better known as Roaring Kitty on YouTube and u/DeepFuckingValue on Reddit. In a throwback to the frenzied speculation of 2021, volume is up nearly 600%, and short traders are down nearly USD1 billion ($1.5 billion). Punters were so enthusiastic about piling into the stock that regulators had to temporarily halt trading to stem volatility.
Gill, a financial analyst and hobbyist day trader, became famous in 2021 for his earnest social media recommendations of GameStop. What to the market looked like an outdated business on the verge of bankruptcy was, to Gill, a steady company with significant upside. As he explained in a subsequent congressional hearing, “I just like the stock.”
So did the internet. Motivated by a mixture of irony and resentment of Wall Street short sellers, who they hoped wouldn’t be able to cover their short positions if the stock spiked high enough, Covid-bound young investors sent GameStop flying from USD5 to a peak of USD493. It eventually retreated all the way back down to as low as USD10. The price nearly doubled in the past three weeks to USD17 before this week’s takeoff.
