In January 2021 something very odd started happening with the stock of GameStop, a once-beloved retail store that looked like it was stuck in bricks-and-mortar while its customers had long gone online. It spiked. And it kept spiking. Why? Anyone who offers a definitive answer would be a liar, but one major factor—and rallying point—was investor Keith Gill, known as Roaring Kitty, and the subreddit r/wallstreetbets.
They called it a meme stock. It rose and rose, and then it plummeted, and almost unbelievably took down the hedge fund Mervin Capital. Everyone was looking at this open-mouthed, and left wondering just what the hell happened. Don't ask Roaring Kitty either, who ended up mewling to Congress that "even I barely understand these matters."
Gill is playing his own game, one on which many seem willing to follow him, and after a three-year absence has now returned to the fray. Unfortunately the cliche is even more exciting than the reality of Gill's presence thus far, which has mostly been posting extremely mid memes. Really?
Nevertheless this has essentially acted as the Horn of Rohirrim for all those whose favourite word is "stonks". The mere news of Gill's return to social media after such a pause, made with a teaser meme implying more to come, caused an instant rush and spike in GameStop stock: and, almost as quickly, a ban on trading in it.
pic.twitter.com/YgjVqtgcNSMay 13, 2024
Shares of GameStop soared over 100% in value on Monday, before eventually closing at just over $30 per share (up 75%). Gill's return was possibly sparked by the fact that the stock had recently been on an upwards trend, rising in value around 60% over past weeks. The change in the share price was so extreme that at one point trading was temporarily halted, leading to the usual conspiracy theories, before resuming.
Shares in other so-called meme stocks such as AMC, a cinema chain, also saw an extraordinary spike of up to 120% in value. Blackberry rose 18% while Tupperware, yes Tupperware, rose 24%. These are the highs: these stocks are proving incredibly volatile and, by the time you're reading this, may well have tanked.
That's because, whatever Gill may be up to, meme stocks are a terrible investment for the vast majority of small traders. The meme he initially posted on Twitter shows a man leaning forwards in his chair, usually used in the context of "shit's about to get real", and this was followed over the last 24 hours by a whole assortment of videos that all basically amount to a tease that something is happening.
Is it? The wolves of Wall Street have been here before, and they don't like this cat. Gill's return "seems to be the most likely suspect for the renewed interest today... but I would be careful not to characterize the participants in this phenomenon as investors,” said Art Hogan of B Riley Wealth. "There’s no fundamental change in any of the companies that are popularized in this phenomenon."
Others simply can't hide their scorn.
"It is gambling," said fund manager Cole Smead on CNBC. "You’ve got to remember these are young people, these are 40-year-old people like me, who are going out and doing stuff that is just frankly stupid."
As for Gill, he's not talking to any major outlets. But he has kept on posting memes: the most recent, around an hour ago, features a grumpy looking cat with the text "Morning affirmation" before a voiceover intones:
"Don't be the bigger person today. Be the person that helps them understand that sometimes, when you fuck around, you find out."
