Has the excitement for meme stocks resurged?
The simple action of posting a few photos and videos from the former leader of the meme stock movement on a platform called X is enough to cause certain share prices to skyrocket. No one seems to know what "Roaring Kitten" truly intends to do.
Originally, it was just one image that the user "Roaring Kitty" posted on X. The picture depicted a man with a video game controller in his hands, first leaning back in his chair and then leaning forward. Gaming enthusiasts use this image to express excitement. This single image and other similar memes that followed led to a significant reaction in the stock market.
Roaring Kitty, whose real name is Keith Gill, did not speak about his memes. The mere fact that he posted again after over two years and hinted at something set the investing community on edge. Gill is the brains behind the meme stock movement, which in spring 2021 skyrocketed the shares of companies like GameStop and ruined those who were short selling. It was a brief craze that made some amateur investors rich while costing others, including notorious hedge funds, a lot of money. There was much debate about how the financial market was biased against small investors. Gill had to testify before the US Congress.
Then everything fell silent. Gill stopped posting on his social media channels. The meme stock movement essentially came to a halt. The prices of the hyped stocks returned to normal. Until yesterday. "Here we go again," wrote a user on Wallstreetbets on the Reddit platform, which was the central hub for meme traders three years ago. And it started immediately. Users shared screenshots of their new bets on the same stocks as before, including GameStop, the AMC cinema chain, and Blackberry. Within hours, prices soared.
The share price for GameStop increased by nearly 120% in just a few hours. Blackberry, AMC and other well-known meme stocks also saw a jump of around 10% or more.
Is the meme stock hype back on track?
It's far from certain that the meme stock hype will continue to soar. Many hobby traders with spare cash are still willing to move share prices, albeit in the short term. "I have $100,000 and I am ready to risk it all," boasted one user on Wallstreetbets. However, there were other factors at play when the GameStop share price exploded in 2021, with gains of over 2000% at the height of the hype.
At the time, hedge funds and other speculators betting on a falling share price had sold more shares short than actually existed. This type of speculation involves borrowing shares, selling them, and then buying them back at a lower price before returning them to the original owner. In 2021, Gill and others understood that the short sellers would be in trouble if the GameStop share price increased. Presently, GameStop has around 30% of its shares sold short, but not nearly as many as in 2021.
Perhaps the most unsettling aspect is that no one knows for sure what Gill - also known as "Roaring Kitten" - is up to. With each passing meme, he has only amplified the tension without offering any specific information. Some investors simply bought some of the old meme stocks and made a profit, while others are more wary or even annoyed by the hype. Some even suspect that Gill's X account may have been hacked. "This feels like the ultimate pump and dump," posts one user, meaning someone is deceptively driving up prices in the short term to profit before they fall again.
Read also:
- Lack of snow also opens up new opportunities for winter tourism
- Abrupt end to e-car subsidies
- The chemical industry has little confidence
- Intersport boss hopes for sales boom through sporting events
The resurgence of interest in meme stocks has led some users on Wall Street Bets to invest in shares like GameStop, AMC, and Blackberry, causing their prices to bump up significantly. Despite the hype, it's unclear if Roaring Kitty, the figure behind the meme stock movement, has any specific plans, which has led to mixed reactions among investors.
Source: www.ntv.de
