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Roaring Kitty's Comeback: GameStop Shares Surge Over 70% 2024-05-21 01:55:42

Roaring Kitty's Comeback: GameStop Shares Surge Over 70%

Roaring Kitty Resurfaces, Sparking GameStop's Meteoric 72% Surge

GameStop shares surged over 72% on Monday as trader Keith Gill, famously known as "Roaring Kitty," returned to the spotlight after four years, reigniting memories of the investment frenzy he led involving the video game retailer. Gill, a former financial analyst at MassMutual, gained notoriety in late 2020 for urging amateur retail investors to buy GameStop shares during the meme stock craze, using Reddit discussion boards and YouTube videos to propagate his strategy and amassing a considerable following in the process.

However, Gill's fortunes took a downturn in 2021 when he publicly disclosed a staggering $13 million loss in a single day from his GameStop investments. Additionally, he faced legal troubles with a lawsuit accusing him of promoting GameStop shares through "deceptive and manipulative conduct." Following a congressional inquiry into the meme stock phenomenon, Gill's social media presence vanished.

The trader made a surprising return on Sunday night with a cryptic post on X, signaling the end of his nearly three-year hiatus. Subsequent posts featured comeback-themed videos, hinting at his resurgence. Despite requests for comment, GameStop remained silent on the matter.

GameStop was one of several struggling companies, including AMC, Bed Bath & Beyond, and Blackberry, embraced by retail investors on Reddit during the pandemic. This collective effort aimed to support these companies financially while inflicting a "short squeeze" on hedge funds betting against their success. Hedge funds, such as Citron Research and Melvin Capital, incurred significant losses during GameStop's meme-driven rally, amounting to billions of dollars.

While GameStop had been grappling with declining sales due to industry shifts towards digital downloads, meme stock investors helped the company achieve its first profit in two years by March, following seven consecutive quarterly losses. The trend continued, culminating in GameStop's first annual profit since 2018, bolstered by Roaring Kitty's recent post, which propelled the share price to $28.25 on Monday, though still below its all-time high of $120.75 in January 2021. Shares of AMC and Bed Bath also experienced marginal increases on Monday.

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