- Keith Gill, known as Roaring Kitty, posted positions showing over $200 million worth of GameStop shares and call options on Reddit
- This sent GameStop’s stock surging over 70% in pre-market trading on Monday, poised to cause nearly $1 billion in losses for short sellers
- Gill’s return reignited interest in the “meme stock” frenzy he helped spark in 2021 by rallying traders against Wall Street through GameStop
The online return of Keith Gill, also known as Roaring Kitty, is moving markets once again. The meme stock influencer who rallied traders to bet big against Wall Street through GameStop in 2021 posted several positions in the video game retailer on Reddit this weekend.
Roaring Kitty’s New Positions
Pushing over $200 million in value, the purported exposure comprises shares and stock options. The news kicked retail traders into an apparent frenzy. GameStop shares rose more than 70% during pre-market trading to $396.69 on Monday, nearly doubling the stock’s $231.14 close on Friday.
According to Unusual Whales, the break-neck increase was set to cause $993 million in losses for short sellers. Short sellers are traders who bet that an asset’s price will drop. By borrowing an asset and selling it instantly, they hope to make a profit in the future by buying the asset back at a lower price and pocketing the difference.
However, a jump in an asset’s price can derail short sellers’ bets if they’re forced buy an asset back at a higher price to close their positions, sparking a so-called short squeeze.
Impact on Markets
GameStop shares popped last month after Gill’s account posted on Twitter (aka X) for the first time in years. Amid a string of cryptic posts, mostly centered around movie references, GameStop’s share price nearly tripled, spiking as high as $487.5 per share in a matter of days.
Already today, like the last time Roaring Kitty returned, there have been trading halts. On the Nasdaq, GME was halted a minute after markets opened because of volatility. A few minutes later, AMC Entertainment Holdings (AMC), which also trades on the Nasdaq and has become a meme stock in its own right, was halted for the same reason.
But it’s not been limited to those two so-called meme stocks. There’s been a wave of NYSE trading halts, most of them citing the limit up-limit down rule that’s meant to mitigate extreme market volatility. It’s not clear whether the broader trading halts are related to the GME trading frenzy.
Comparison to 2021 Short Squeeze
The rally for GameStop’s stock so far pales in comparison to the historic short squeeze that lifted shares of the video game retailer as high as $1,207.5 in 2021. During that time, Gill was active in Reddit community WallStreetBets where he posted routine updates on his trades.
Instead of the aforementioned group, Gill posted a GME YOLO update to the Reddit community Superstonk. The place became a go-to hangout for users to discuss GameStop after tensions arose in WallStreetBets with moderators over the stock’s frequent mentions in 2021.
Conclusion
Though Gill’s online reappearance has stoked palpable interest in GameStop online, the endeavor hasn’t been up only. On Monday when markets opened, the price of GameStop instantly shot down to $329. Still, stock has increased 87% in price over the past month.
