A man passes a GameStop location on Sixth Avenue in New York, March 23, 2021.
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GameStop Shares rose more than 37% premarket on Monday after “Roaring Kitty” was released for the first time in nearly three years.
The post, an image on the
Kitty, whose legal name is Keith Gill, is one of the Reddit traders who drove the meme stock craze in 2021. Gill goes by the name DeepF——Value on Reddit. The trader helped drive retail interest by triggering a massive short squeeze in traditional video game stocks and call options between 2020 and 2021.
Jill was a former marketer for Massachusetts Mutual Life Insurance Company. Through YouTube videos and Reddit posts, Gill encouraged a group of retail traders to pressure hedge funds to short sell GameStop.
Hedge fund Melvin Capital became the target of an army of amateur traders and suffered massive losses that prompted Citadel's hedge fund arm, as well as Point 72, to pump nearly $3 billion into Melvin to shore up its finances.
Once upon a time, the dizzying mania forced brokerage firms, including Robinhood, to limit trading in shorted stocks so dramatically that it blew up their clearinghouse margin. A Robinhood user has filed a class action lawsuit following the app's decision to restrict GameStop trading on its platform. Robinhood won the dismissal of this suit in August 2023.
The volatility also led to a series of congressional hearings into brokerage and retail trading practices, involving the leaders of Robinhood, Melvin Capital, Reddit and Citadel in addition to Gill. This historical episode inspired the 2023 film “Dumb Money,” in which Paul Dano plays Jill.
In January 2021, shares reached an all-time intraday high of $120.75 per share. As retail interest faded, the stock collapsed, along with other meme stocks like AMC. Last month, shares hit a three-year low of $9.95.
GME 5-year chart
Recently, the stock has begun to move higher again, which may have reignited trader interest. The stock is up 57% so far in May and closed Friday at $17.46.
However, GameStop's latest earnings report showed a depressing picture at the video game company. In late March, the company said it was cutting an unspecified number of jobs to cut costs and reported lower fourth-quarter revenue amid increased competition from e-commerce companies.
GameStop reported revenue of $1.79 billion for the fourth quarter, compared to $2.23 billion in the same quarter a year earlier.
