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Over three years after the infamous GameStop (NYSE:GME) short squeeze, the American retailer’s share price skyrocketed as much as 110 percent on Monday (May 13) before pulling back to a more than 70 percent gain.
The surge came on the heels of a social media post by ‘Roaring Kitty,’ also known as Keith Gill. His first online appearance since 2021 has reignited memories of the meme stock frenzy that captivated markets in 2021.
Gill, who gained notoriety for his bullish stance on GameStop, posted a meme on X (formerly Twitter) depicting a focused video gamer. It received widespread attention, accumulating over 81,000 likes and 9,000 comments in just a few hours.
A former marketer for Massachusetts Mutual Life Insurance, Gill became a central figure in the WallStreetBets subreddit and YouTube community during the meme stock craze that happened in 2021.
His relentless optimism about GameStop’s prospects attracted a legion of retail traders, ultimately leading to a historic short squeeze and significant losses for hedge funds betting against the stock.
At its peak, the movement took GameStop’s share price to a pre-market value of over US$500 — a staggering thirtyfold increase from its initial valuation of US$17.25 at the beginning of January 2021.
Short interest in GameStop remains substantial, accounting for approximately 24 percent of the freely available shares.
The latest surge in GameStop shares has further exacerbated losses for short sellers, with May month-to-date losses exceeding US$1.34 billion, according to data from S3 Partners.
This week’s renewed GameStop rally has not been not an isolated event, with other meme-related stocks also experiencing notable gains. AMC Entertainment (NYSE:AMC), a favorite among retail traders, surged by as much as 50 percent during Monday’s session, while Trump Media & Technology (NYSE:DJT) saw an 8 percent increase.
However, the resurgence of meme stocks has reignited concerns among market participants, particularly regarding the sustainability of these inflated valuations. While retail traders are celebrating the latest rally, critics warn of the potential consequences of speculative trading and market manipulation.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.