In a turn of events, GameStop’s stock soared by over 40% on Monday following the reappearance of “Roaring Kitty,” the pseudonymous trader whose rallying cries once ignited a frenzied trading saga. Keith Gill, a former marketer, last posted online roughly three years ago but resurfaced with a cryptic image on X that immediately set the internet abuzz.
The image, depicting a video gamer leaning forward in intense concentration, seemed to signal Gill’s return to the stock market fray. His previous posts had galvanized a legion of day traders who collectively targeted GameStop’s stock, driving its price to dizzying heights in early 2021.
The saga, often dubbed the “meme stock” frenzy, saw individual investors taking on institutional short sellers, particularly targeting hedge funds like Melvin Capital. These funds had bet heavily against GameStop’s success, only to be caught off guard by the coordinated buying efforts of retail traders.
Melvin Capital, in particular, faced severe losses and had to be bailed out by Citadel and Point72 to the tune of nearly $3 billion. The episode prompted widespread scrutiny of brokerage practices, with Robinhood coming under fire for restricting trading in GameStop and other heavily shorted stocks.
The backlash was swift, with Robinhood users filing a class-action lawsuit against the app, although it was ultimately dismissed in August 2023. Another lawsuit targeted Gill himself, accusing him of misleading investors about his trading experience.
The GameStop saga also sparked congressional hearings and a wave of criticism over the gamification of retail trading. Key figures, including leaders from Robinhood, Melvin Capital, Reddit, Citadel, and Gill himself, testified before Congress, highlighting the complexities and risks of today’s stock market landscape.
The entire saga has now been immortalized in the movie “Dumb Money,” released in 2023. As GameStop’s stock once again surges, the legacy of the “Roaring Kitty” saga continues to captivate and divide the investment community.
(Source: Investopedia | The Street | Bloomberg)
