GameStop stock rallies 74% as 'Roaring Kitty' resurfaces on social media after 3 years, posts cryptic tweet

The stock of GameStop, a Texas-based gaming retailer, soared by a massive 74% on the US stock market on Monday. The surge was driven by the return of Keith Gill, known as 'Roaring Kitty', on social media after a three-year hiatus.

Gill, known for his cryptic posts that drove a rally of meme stocks in 2021, had left the online platforms since then. His return on X (formerly Twitter) was timed with the start of market hours on May 13.

From his X handle, that goes by the name of Roaring Kitty, he posted a meme that shows a man leaning forward with a video game controller in his hands. The meme implied that the person was serious about the video game.

This post, claim analysts, sparked a rally in GameStop – seen as a meme stock – with the shares peaking to an 18-month high of $38.2 apiece on the NYSE.

The shares pared some of the gains at the closing bell to settle at $30.45 apiece, higher by 74% as against the previous day's close. The market capitalisation surged to $9.32 billion.

The intraday climb in the stock's value was sharp to the extent that buying or selling of GameStop's shares was halted multiple times during the afternoon trade.

The GameStop rally also lifted other meme stocks like AMC, which spiked by around 78%.

Recap of 2021 rally

Gill's return on social media, and the cryptic post that drove GameStop's shares by 74%, reminisced his series of posts in January 2021 that lifted the company's shares by 21-fold. The gains, however, were pared within a few weeks.

Back then, Gill was considered to have inspired an army of traders to buy GameStop's stock amid the short-selling positions taken by hedge funds.

Typically, short sellers take bearish positions in weakening stocks in hopes to log a profit by buying back later when the price further recedes.

Gill's resurfacing on X has caused an estimated cumulative loss of $838 million to short-sellers, data firm S3 Partners said. According to FactSet, the short position in GameStop's stock amounts to 24% of the total shares.