Monday Jun 3 2024 13:20
4 min
GameStop stock surged in premarket trading on Monday after the Reddit account at the center of 2021’s meme stock frenzy posted for the first time since April 2021.
The video game retailer's stock jumped 102% to $47 in volatile early trading before settling back to $41, marking a 77.5% rise. Fellow meme stock AMC, the cinema chain, also saw premarket gains, rising 25% to $5.4.
The rally followed a post by Keith Gill, known as Roaring Kitty on X and YouTube and DeepF—Value on Reddit, who shared a screenshot reportedly showing a $181.4 million position in GameStop stock and options.
The screenshot, which couldn't be verified by multiple media outlets such as Barron’s, indicated an account holding five million GameStop shares worth $115.7 million, purchased at an average price of $21.27.
Gamestop stock closed at $23.14 on Friday. The screenshot also displayed 120,000 call options expiring on June 21, worth $65.7 million, giving the right to purchase shares at $20.
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On X, Gill also posted an image of a green Uno “reverse” card. The posts are “are sure to spark renewed interest in GameStop and other meme stocks,” as per MarketWatch reporter Connor Smith.
In May, Gill reignited a frenzy in meme stocks with his first post on X since 2021, sharing a video that appeared to be a farewell.
Markets.com Chief Market Analyst Neil Wilson said there was no fundamental reason for the GameStop stock gains — or any other similar shares, such as AMC — when the meme stock rally came to life in mid-May, saying:
“Short interest in GME stood at 24% before the fireworks, so we can assume a fair chunk of the move is short-covering action chasing the initial move up, plus some hedgies will have had calls on their shorts.
Trend following and momentum strategies may have helped. And it looks like retail investors are becoming more bullish again and willing to take on more risk. There is no fundamental reason for the move as such — GameStop’s last earnings report was abysmal”.
Gill gained folk hero status on Reddit and other online communities for his bullish bets on GameStop stock, which saw GME soar to unprecedented levels in 2021 amid a buying spree by users and funds aiming to squeeze short sellers. Reddit users organized on the WallStreetBets forum, sharing memes and song parodies promoting the movement to buy GameStop stock.
Prior to the recent post, Gill's last update on his GameStop position was on April 16, 2021, showing he owned $30.94 million in GameStop stock and $3.54 million in cash.
Gill made his new post on the SuperStonk subreddit, an offshoot of WallStreetBets that gained popularity after WallStreetBets moderators restricted GameStop-centric posts, especially those based on conspiracy theories.
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