GameStop Shares Surge After Keith Gill's Post

By Manya Saini, Suzanne McGee and Saqib Iqbal Ahmed

(Reuters) – GameStop's shares jumped on Thursday following a cryptic post from meme stock influencer Keith Gill, who gained fame after his online personas and bullish bets on the company inspired a trading frenzy among retail investors.

Gill shared a picture resembling a 2006 Time magazine cover featuring a computer screen on the social media platform X. After this post, GameStop (NYSE:GME) shares rose, reaching a high of $30.87, ultimately closing up 6%.

Known as "Roaring Kitty" on YouTube and "DeepF—ingValue" on Reddit’s WallStreetBets, Gill played a pivotal role in the “Reddit rally” when GameStop’s stock skyrocketed 1,600% in January 2021, resulting in substantial losses for hedge funds that bet against it.

Steve Sosnick, chief strategist at Interactive Brokers, pointed out that this behavior is typical in GameStop's trading: the stock tends to rally, then Gill resurfaces with a post, leading to further price movements. Previously, the stock was at $21 earlier in November but surged to $30 around Thanksgiving, then retraced most gains over the following days.

On Thursday, around 300,000 GameStop options contracts were traded by 2:14 p.m. (1914 GMT), at about 1.5 times the normal rate, according to options analytics firm Trade Alert. The stock’s 30-day implied volatility reached a 3-week high of 132%, up from 93% the prior session.

Contracts speculating that the shares would close above $30 by Friday were the most actively traded, with approximately 32,000 contracts exchanged by late afternoon.

'ANIMAL SPIRITS'

Gill returned to social media earlier in 2024 after a three-year break, sparking excitement among followers likening him to a David challenging Wall Street's Goliaths.

Art Hogan, a market strategist at B. Riley Wealth Management, stated, "The resurgence of meme stocks often aligns with an increase in market enthusiasm and animal spirits. As markets near all-time highs, speculative interests in stocks typically reignite."

The 2021 meme stock rally began with Gill’s posts on WallStreetBets about his investment gains in GameStop, catching the attention of retail investors and leading to a broader focus on other heavily shorted stocks like AMC Entertainment, as Reddit users joined forces to challenge hedge funds, incurring billion-dollar losses and attracting regulatory scrutiny.

This episode inspired the 2023 film "Dumb Money" directed by Craig Gillespie.

Following Gill's recent post, other meme stocks also saw increases; Unity Software shares rose 5%, while AMC climbed 6%. Sosnick noted that interest in cryptocurrency has overshadowed GameStop excitement recently, with the stock up about 76% this year, while Bitcoin surged over 130%, surpassing the $100,000 mark amid easing regulatory concerns—demonstrating a robust rally for the largest cryptocurrency in the market.