GameStop and AMC Entertainment shares experienced a significant surge this week, reminiscent of the 2021 trading frenzy driven by retail investors on social media platforms. This resurgence is primarily linked to renewed activities by Keith Gill, known as “Roaring Kitty,” who has historically influenced “meme stock” movements. In January 2021, stocks like GameStop and AMC Entertainment saw extraordinary price jumps due to coordinated buying sprees on platforms like Reddit. This led to significant short squeezes, disrupting traditional market dynamics and prompting regulatory scrutiny and discussions about market fairness.
After nearly three years of inactivity, “Roaring Kitty” returned to social media, sparking a resurgence in GameStop and AMC stocks. GameStop shares were up more than 74 percent, while AMC saw an impressive 91.5 percent increase in share price, both rising over 200 percent since May 8. Cinema chain AMC, struggling since the pandemic, raised $250 million in a share sale completed on Monday. Other stocks favored in meme rallies, such as BlackBerry and Koss, also showed notable increases. Short-sellers were reported to lose more than a billion dollars, raising concerns about the sustainability of the surge.
Experts remain skeptical about the longevity of this surge, citing rising interest rates and inflation in the broader economic context. Matthew Tuttle, CEO of Tuttle Capital Management, described the return of “Roaring Kitty” as fascinating but potentially meaningless to the stock market. Former SEC chairman Jay Clayton expressed concern about meme stocks, describing them as closer to gambling than trading or investing. While holders of GameStop and AMC stocks have benefited from the surge, questions remain about the sustainability of these gains given the history of meme stock frenzies subsiding.
Looking ahead, analysts will likely continue to analyze the influence of social media figures like “Roaring Kitty” and its implications for market regulation and investor behavior. The meme stock phenomenon has raised important questions about market fairness and the role of social media in stock trading. While the immediate impact of the surge has been beneficial for some investors, the long-term sustainability remains uncertain. As discussions about market regulation and investor behavior continue, the future of meme stocks like GameStop and AMC Entertainment remains unpredictable.
