Source: AFP
Shares of GameStop, the company at the center of the “meme” craze that ravaged Wall Street in early 2021, soared on Monday in a move reminiscent of an earlier speculative frenzy.
Shares were up more than 63 percent at $28.52 by 17:30 GMT. AMC Entertainment, another “mimic stock” of that period, jumped nearly 50%.
The move, which analysts said was not based on the companies’ fundamentals, led to losses of about $1 billion by short-sellers who bet on a decline in the stock price, CNBC reported.
The GameStop outburst followed the sudden re-emergence on social media of “Roaring Kitty,” a key figure from 2021 who posted Sunday night on social platform X for the first time in three years.
In a subsequent post, ‘Roaring Kitty’ announced the launch of a digital currency.
The account is run by investor Keith Gill, a longtime GameStop shareholder who had argued in a series of posts before the January 2021 blowout that the company was undervalued, making his analysis public on Reddit.
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Gill’s commentary went viral on the platform, helping to fuel a buying frenzy that led to punishing losses for some hedge funds that had bet against the company.
These include Melvin Capital, which suffered heavy losses in early 2021 when GameStop jumped from $17 to a high of $483. Melvin closed in May 2022.
The trading phenomenon, which took place amid the Covid-19 pandemic, prompted a congressional hearing and the 2023 feature film “Dumb Money,” starring Paul Dano as Gill.
In the first post on X since June 2021, “Roaring Kitty” posted an illustration of a male figure shifting position, suddenly leaning forward in a chair, as if expressing alertness.
The post generated nearly 10,000 comments, 23,000 retweets and 85,000 likes just after noon on Monday.
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In subsequent messages on Monday, the account posted a series of film and video clips, including a car chase scene and a video of an orange cat waking up to a Radiohead track.
One of the posts announced the launch of the $KITTY cryptocurrency on Thursday. The X post included a logo of a cat wearing a bandana roaring and has garnered nearly 67,000 views.
Source: AFP