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GameStop Stock Surges 30% Following Renewed Posts By Trader ‘Roaring Kitty’, Key Figure In Meme Craze

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The premarket trading session on Monday witnessed a notable surge of more than 37% in GameStop shares, ignited by a reappearance online by “Roaring Kitty,” the individual credited with catalyzing the unprecedented short squeeze phenomenon of 2021.

This online resurgence, featuring a picture on X portraying a video gamer leaning forward with a demeanor suggesting intense focus, marked Roaring Kitty’s first engagement on the platform—or Reddit—since 2021.

Previously known as Keith Gill, Roaring Kitty had a background in marketing with Massachusetts Mutual Life Insurance. Under the pseudonym DeepF——Value on Reddit, Gill garnered a following of day traders who rallied together, driving significant activity in GameStop’s stock and call options between 2020 and 2021.

Hedge fund Melvin Capital, deeply entrenched in short positions on GameStop, found itself in the crosshairs of these amateur traders, incurring substantial losses. This led Citadel’s hedge fund arm, alongside Point72, to inject nearly $3 billion into Melvin Capital to stabilize its financial position.

The extraordinary market frenzy prompted brokerages like Robinhood to impose restrictions on trading heavily shorted stocks, owing to overwhelming pressure on their clearinghouse margin. Robinhood faced a class-action lawsuit in response to its decision to limit GameStop trading, ultimately securing dismissal in August 2023.

Gill himself faced legal action, accused of misrepresenting his trading experience despite being a licensed professional.

This volatile episode sparked Congressional hearings addressing broker practices and the gamification of retail trading, with key figures from Robinhood, Melvin Capital, Reddit, Citadel, and Gill himself summoned. The events of this historic saga inspired the 2023 film “Dumb Money,” featuring Paul Dano in the role of Gill.

In January 2021, GameStop shares reached an all-time high of $120.75 per share (split-adjusted), followed by a 4-for-1 stock split announcement by the company in July 2022. However, as retail interest waned, the stock plummeted, along with other meme stocks like AMC, hitting a three-year low of $9.95 last month.

Recent upward movement in the stock may have reignited trader interest, with a 57% increase observed in May thus far, closing at $17.46 on Friday.

Nevertheless, GameStop’s latest earnings report painted a bleak picture for the company. In late March, it announced job cuts aimed at cost reduction and reported lower fourth-quarter revenue, citing increased competition from e-commerce firms. Fourth-quarter revenue stood at $1.79 billion, down from $2.23 billion in the corresponding quarter of the previous year.

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