While it seemed in mid-May that the uproar over GameStop and ‘meme’ stocks had disappeared as quickly as it had appeared, it looks like the subject likes to come back like a boomerang. Trader Keith Gill, more widely known by his nickname ‘Roaring Kitty’, who was one of the main faces of the 2021 rally in GameStop shares, as well as the recent moves in May, has become active again on his social media.
This time, he posted a picture on Reddit showing a position consisting of 5 million GameStop shares and 120,000 call options expiring on 21 June 2024, for a total position of almost $175 million. The authenticity of the photo itself is uncertain, and there are also doubts about the true identity behind Roaring Kitty's accounts.
Nevertheless, investors interested in ‘meme’ stocks do not seem to be bothered by those speculations. GameStop's shares in pre-market trading shot up by more than 70%, dragging other companies entering the ‘basket of meme companies’ with it. AMC gains almost 28%, Faraday Future Intelligent Electric is up 18% and SunPower is up 13%.
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Create account Try a demo Download mobile app Download mobile appThe May frenzy showed that such situations are extremely short-term in nature, with most companies recording declines less than a week after dynamic increases. Nonetheless, it is worth remembering that the increases in May were stimulated by a single post, which, in addition, was not even directly related to the financial market. This time post showing position might increase more stable momentum. Nevertheless, the market's confidence in the authenticity of Roaring Kitty's profile, as well as the persistence of the speculators themselves, will determine the future of potential further directions of change. This makes engagement with GameStop-related companies in such an environment inseparably linked to increased risk and volatility.
GameStop rally in May ended just after 5 days (yellow square on the chart). Upward move in pre-market is still less strong than the previous one. In 2021 stocks' price rose even more drastically, achieving over $120. Source: xStation
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