“Roaring Kitty,” catalyst of the 2021 GameStop frenzy, reemerged with his first online post in approximately three years. GameStop and AMC trading encountered multiple halts on Monday amid heightened volatility. Keith Gill, also known as Roaring Kitty, had a prior career as a marketer for Massachusetts Mutual Life Insurance.
GameStop and AMC: Catalysts of Financial Frenzy
GameStop and AMC stocks surged Monday as “Roaring Kitty,” catalyst of the 2021 short squeeze, made his first online post in about three years.
The post, an image of a serious video gamer on X, signified Roaring Kitty’s first post on the platform, or Reddit, since 2021. It has received 63,000 likes within 13 hours.
GameStop surged 74.4%, peaking at 110%, with trading halted several times due to volatility. AMC, also caught in the frenzy, closed Monday up 78.4%, doubling at one point. Reddit gained almost 9%.
Roaring Kitty: From Marketer to Reddit Sensation
Roaring Kitty, aka Keith Gill, once a marketer for Massachusetts Mutual Life Insurance, gained fame as DeepF——Value on Reddit. Gill rallied day traders to invest in GameStop and its call options between 2020 and 2021.
The “meme stock” craze saw retail investors targeting short sellers and hedge funds skeptical about GameStop and other firms, leading to short covering and stock price surges. GameStop’s short interest exceeds 24% of its freely tradable shares, known as the float. Gill later shared videos featuring TV and movie scenes, their significance unclear.
GameStop dominated Reddit’s WallStreetBets on Monday, garnering over 600 mentions in the past 24 hours, surpassing Nvidia, a popular chipmaker, according to Quiver Quantitative market research platform.
Melvin Capital faced repercussions from WallStreetBet traders due to heavy shorting of GameStop. The hedge fund, targeted by amateur traders, incurred significant losses, leading Citadel and Point72 to provide nearly $3 billion in financial support.
Short selling involves investors borrowing stock shares at a set price, anticipating the market value will drop below that level when repurchasing the borrowed shares.
GameStop’s frenzy, propelling its split-adjusted stock over $120 from $3 within three months in early 2021, led brokerages like Robinhood to restrict heavily shorted stock trading. A Robinhood user filed a class-action lawsuit against the app’s decision to limit GameStop trading, dismissed in August 2023.
Another class-action lawsuit accused Gill of posing as an amateur trader despite holding professional licensing.
Congressional Hearings and Cinematic Inspiration
The volatility led to congressional hearings on brokers’ practices and retail trading gamification. Testimony was given by leaders of Robinhood, Melvin Capital, Reddit, Citadel, and Gill. The events inspired the 2023 movie “Dumb Money,” starring Paul Dano as Gill.
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