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GameStop Corp. (NYSE:GME) shares surged over 37% in premarket trading on Monday following a social media post by the individual known as “Roaring Kitty,” who was a key figure in the 2021 meme stock craze.
What Happened: Keith Gill, also known as “Roaring Kitty,” posted a picture on X, marking his first online activity since 2021. Gill, a former marketer for Massachusetts Mutual Life Insurance, gained a following of day traders who rallied around the GameStop stock and call options.
The surge in GameStop’s stock price led to significant losses for hedge fund Melvin Capital, which was heavily shorting the stock. This prompted Citadel and Point72 to inject nearly $3 billion into Melvin to stabilize its finances, according to CNBC.
During the frenzy, brokerages like Robinhood restricted trading in heavily shorted stocks, leading to a class-action lawsuit against the app. Gill himself faced a lawsuit alleging that he misrepresented himself as a novice trader despite being a licensed professional, according to CNBC.
See Also: $1000 Invested In GameStop 5 Years Ago Would Be Worth This Much Today
The GameStop saga also sparked congressional hearings on retail trading practices, involving key players like Robinhood, Melvin Capital, Reddit, Citadel, and Gill. The events of 2021 were later adapted into the movie “Dumb Money,” with Paul Dano portraying Gill.
Despite a recent uptick in GameStop’s stock price, the company’s financials paint a less optimistic picture. The firm reported a decrease in fourth-quarter revenue and announced job cuts to reduce costs amid rising competition from e-commerce companies.
The recent surge in GameStop’s stock price follows speculation about Gill’s renewed activity on social media. Traders had noticed activity on Gill’s X account, suggesting a possible return to the market.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Posted In: GME
