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70% Increase In GameStop Sales As ‘Roaring Kitty’ Resurfaces

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A GameStop store in New York, on March 4, 2024. (Shelby Knowles/Bloomberg via Getty Images / Getty Images)

(CTN News) – GameStop shares rose for the first time in three years Monday following the internet publication of “Roaring Kitty,” the person responsible for the 2021 short squeeze.

On X, Roaring Kitty posted a photo of a video gamer seems focused. This graphic has signified Roaring Kitty’s Reddit debut since 2021. After 13 hours, the post had 63,000 likes.

There was a 70% increase in GameStop’s value compared to its peak of 11% when its stock was last traded. The volatility of the market caused GameStop’s trading to be paused due to a halt in trading. Reddit gained 9% on Monday, while AMC, another parody stock, rose 43% on Monday.

Keith Gill, known as Roaring Kitty, was a Massachusetts Mutual Life Insurance salesperson. Gill, known as DeepF——Value on Reddit, led an army of day traders who flooded physical video game stocks and GameStop call options in mutual support between 2020 and 2021.

During the “meme stock” craze, private investors targeted hedge funds and short sellers with negative views on GameStop and other companies. These companies enforced short position coverage, raising target equity prices. Short interest in GameStop shares surpasses 24% of the float, which includes all freely tradable shares.

Gill then published other videos with snippets from famous films and TV shows, but their value is still debated.

Quiver Quantitative reported that GameStop eclipsed Nvidia as Reddit’s WallStreetBets’ most discussed stock on Monday with over 600 mentions in 24 hours.

Due to Wall StreetBet speculators, Melvin Capital was heavily criticized. The hedge fund lost a lot of money shorting GameStop, attracting inexperienced traders. Melvin received roughly $3 billion from Ken Griffin’s Point72 and Citadel.

Short selling involves investors buying a stock at a predetermined price in hopes that its market value will fall below that level. The investors must redeem the borrowed shares.

Brokerages like Robinhood restricted trading on highly shorted equities to prevent GameStop’s split-adjusted share price from plummeting from $3 in three months to $120 in early 2021. Robinhood users filed a class-action lawsuit after the program banned trading. The lawsuit was dropped in August 2023.

Gill was sued in another class-action lawsuit for impersonating an inexperienced trader despite having a professional trading license.

Besides the Gill case, the turmoil sparked congressional examinations into brokerages and retail trading practices. Citadel, Melvin Capital, Robinhood, and Reddit CEOs testified. Gill, played by Paul Dano in “Dumb Money,” was driven by the whole ordeal.

Adjusted for a summer 2022 4-for-1 stock split, GameStop shares peaked at $120.75 intraday in January 2021. Like AMC Entertainment Holdings and other meme stocks, investor interest waned, lowering the stock price. Last month, Game Stop hit $9.95, a three-year low.

Gill’s attention may have been rekindled by the stock’s recent rise and the company’s many short offerings. GameStop rose 57% in May, peaking at $17.46 on Friday.

The video game company’s latest earnings report paints a bleak picture of its operations. GameStop reported a fourth-quarter sales drop and an undefined number of staff cuts in March as cost-cutting measures. The corporation also noted rising e-commerce competition.

GameStop earned $1.79 billion in the fiscal fourth quarter of 2017 compared to next year.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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