Quick Look:
- Keith Gill’s social media post reignited meme stock rallies, with GameStop shares leaping 74% and AMC 78%.
- This caused multiple trading halts and inflicted $1 billion in losses on short sellers.
- Despite the controversy, Gill maintains his posts are educational, not financial advice.
On May 13, 2024, Keith Gill (Roaring Kitty) broke his three-year silence on the social media platform X. His return sparked a monumental rally in meme stocks. Most of all – GameStop (GME) and AMC Entertainment (AMC). The internet personality is famous for his role in the 2021 GameStop trading frenzy. This time, he posted a meme that has once again set the financial markets ablaze.
GameStop Peaks at 110%, AMC Climbs 78% in Trading Frenzy
In an extraordinary trading day following Gill’s post, GameStop shares surged by 74%, with an intraday peak seeing an over 110% increase before the market’s volatility protocols kicked in, initiating multiple trading halts. AMC Entertainment wasn’t far behind, posting a 78% gain as enthusiastic traders piled into what they viewed as underappreciated stocks. Meanwhile, related stocks like Reddit and Robinhood Markets also experienced gains, albeit more modest at 9% and 4%, respectively.
Short Sellers Incur $1B Losses as Meme Stocks Soar
The rapid price ascension triggered several circuit breakers on the stock exchange as GameStop shares experienced severe volatility, reminiscent of the 2021 meme stock phenomenon. According to market analysts, short sellers found themselves in a precarious position, incurring roughly $1 billion in mark-to-market losses on GameStop alone.
Keith Gill defended his actions by asserting that he only used social media for educational purposes. Furthermore, he clarified that his investment discussions were not financial advice, emphasizing that whether other investors bought the stock was irrelevant to his thesis. This reflects his consistent stance regarding the purpose of his investment discussions.
Amidst the frenzy, misinformation about trading restrictions circulated. Robinhood spokesperson Anupriya Ghate clarified that Robinhood had not shut down the purchase of GameStop shares. She explained that the elevated volatility and movement of GME triggered market-wide exchange trading limits and halts, which were not specific to Robinhood.
GameStop Rally Mirrors 2021 Mania, But Analysts Skeptical
This event harks back to the 2021 GameStop mania, which saw the stock reach an all-time high of $483, a scenario Keith Gill at the time deemed highly improbable. The events also inspired the 2023 film “Dumb Money,” where Paul Dano portrayed Gill amidst the backdrop of the meme stock saga.
As speculation mounts about the potential for a repeat of the GameStop rally, financial analysts remain sceptical. The current market conditions are fundamentally different, and while the recent surge has captured the imagination of retail investors, experts question the sustainability of such rallies in today’s economic climate.
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