GameStop Stock Erupts Again as ‘Roaring Kitty’ Reveals $175 Million Position

The original meme stock mania has been reawakened with a vengeance. GameStop (GME) shares skyrocketed over 70% amid frantic trading on Monday after retail trader Keith Gill, popularly known as “Roaring Kitty,” revealed a colossal new bullish position in the video game retailer.

In his first major post on Reddit in years, Gill shared a screenshot that appeared to show a staggering $175 million bet on GameStop. The purported stake consisted of 5 million shares valued at $116 million and $65.7 million worth of call options expiring in June.

The revelation instantly reignited the meme stock frenzy. Feverish trading volumes in GameStop stock spiked more than tenfold, briefly surpassing even the mighty Apple (AAPL) at one point. By mid-morning, GameStop’s heavily shorted shares had skyrocketed as high as 75% in an explosive upward move reminiscent of the legendary January 2021 short squeeze.

Fellow meme favorites like AMC Entertainment (AMC) caught a powerful sympathy rally bid as well, surging over 20% on massive volumes before getting temporarily halted. The meme stock comeback had arrived in full force.

Gill’s outsize position punched far above GameStop’s relatively small $7 billion market cap. Analysts noted the dramatic price impact stemmed from the stock’s concentrated short position, which got pulverized as the fortunes quickly shifted.

The sudden lurch higher put short sellers covering their losing bets on a pace to absorb nearly $1 billion in losses, according to analytics firm Ortex. GameStop once again became the most frenzied trading name across no-fee retail platforms like Robinhood (HOOD).

Longtime GameStop investors flooded Reddit forums like WallStreetBets and Superstonk with jubilant scenes. Rocket emojis and feverish rallying cries echoed the legendary meme stock heydays of 2021 as the “diamond hands” crowd smelled redemption.

However, some analysts cautioned that chasing GameStop’s vertigo-inducing rally carried substantial risks. The company continues grappling with operational challenges like slowing sales and a customer shift away from physical games toward digital downloads and streaming.

Still, the meme mania machine may be too powerful to stop now that it has been reactivated by its celebrity mascot. GameStop raised $933 million last month from a stock sale, taking advantage of May’s initial retail resurgence to fortify its turnaround ambitions.

While May’s hype dissipated quickly without broad staying power, the same explosive ingredients powering 2021’s mania remain in place today – and have only intensified with Gill’s outsized position. GameStop’s short interest spiked to nosebleed levels, leaving bearish traders acutely vulnerable to getting blown out by a sustained rally.

Those dynamics set the stage for an epic rematch between the “diamond hands” unleashed and hedge funds caught flat-footed. Redemption beckons for the OG meme crowd still down on their initial GameStop bets. Meanwhile, a new generation of retail traders is getting initiated into the frenzy, enticed by visions of generational wealth on a lucky long-shot wager.

There are no guarantees the meme stock fever lasts. But the tantalizing combination of high short interest, heavy retail buy interest, and now the return of an idolized icon like Roaring Kitty has all the makings of another wild speculative blowoff. The opening act of 2021’s wildest stock story may ultimately prove just the warmup before a shocking meme stock encore too insane to script.

GameStop Frenzy Erupts as “Roaring Kitty” Resurfaces After 3 Years

In an explosive return, the man who inspired the historic GameStop “meme stock” mania in 2021 has re-emerged from a three-year hiatus – sending shockwaves through Wall Street once again.

Keith Gill, known online as the legendary “Roaring Kitty” had been silent across social media since rallying an “ape army” of retail traders to bet big against hedge funds that were shorting GameStop stock. That is, until May 13th, 2024, when he ominously posted a simple image of an intensely focused video gamer to his X account.

The GameStop “Roaring Kitty” Rallying Cry Heard Again
It was all the wake-up call the meme stock movement needed. Within hours of Gill’s first post in over 1,000 days, shares of GameStop Corp (GME) were halted for volatility multiple times as they skyrocketed as much as 110%. When the mayhem settled, the video game retailer’s stock closed a staggering 70% higher on the day.

The Roaring Kitty-inspired surge was a flashback to January 2021, when GameStop became the poster child for a new era of disruption on Wall Street. Gill’s passionate YouTube streams advocating for the struggling company had mobilized a horde of online day traders from the Reddit forum r/WallStreetBets.

By piling into GameStop shares and options contracts, these self-dubbed “apes” triggered a cataclysmic short squeeze – forcing institutional investors with massive bearish bets against GME to cover their positions at rapidly escalating prices. Within two weeks, the stock had captured the world’s attention by inexplicably spiking over 2,700% from $17.25 to an intraday peak of $483.

Hedge Fund Decimation and Hollywood Deals
Billion-dollar hedge funds like Melvin Capital were decimated by the GameStop short squeeze, requiring emergency cash injections to stay afloat. The historic market event shined a light on the fragility of Wall Street’s short-selling practices and the power of unified retail investors.

Roaring Kitty himself faced intense scrutiny over his role. Gill testified before Congress about his GameStop windfall and was slapped with a class-action lawsuit alleging he misrepresented his expertise. The saga even inspired the 2023 feature film “Dumb Money,” with actor Paul Dano portraying Gill’s journey to meme stock fame.

Can Lightning Strike Twice for Meme Stocks?
While the hype around GameStop had cooled off in recent years, Roaring Kitty’s comeback appearance instantly rejuvenated the movement he started. But can retail traders engineer another shocking short squeeze against institutional behemoths?

GameStop’s core business remains on shaky ground against digital downloads and e-commerce juggernauts. In its latest earnings report, the company posted lower revenue and cut jobs to reduce costs, showing its stock may still be disconnected from fundamentals.

However, with Roaring Kitty leading the rallying cry once more, the army of “ape” traders is ready to shake up the establishment all over again. And with nearly 25% of GameStop’s shares still sold short, the conditions may be ripe for another seismic confrontation in the meme stock revolution.

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