Why GME’s resurgence could signal another meme stock frenzy

A single JPEG catalyzed yet another dizzying rise in the share price of video game store GameStop: its price rose more than 70% on Monday morning.

On the evening of Sunday, May 12th, a man named Keith Gill posted an illustration on X of a man rising in his chair. Gill, who goes by the name Roaring Kitty, is something of a digital folk hero for many amateur investors – he was one of the main catalysts for the 2021 WallStreetBets craze. on the rise – suggest that the US is in the midst of another period of meme stock frenzy, in which small investors come together to drive the stock market in unpredictable ways. On Monday, GameStop shares briefly surpassed $36 – their highest price since August 2022– and have been halted several times due to volatility. And GameStop surpassed both Google It is X list of main trends.

In late 2020, Gill became known for his stock market advice on YouTube and the Wall Street Bets subreddit. In particular, he advised his fellow investors to buy GameStop shares, believing them to be undervalued. Some of Wall Street’s main institutions, on the contrary, were betting on GameStop’s failure, as fewer and fewer people went to physical stores to buy video games, instead of buying them online.

But a broad online community soon rallied around Gill’s thesis, hyping GameStop with memes and other social media posts. Millions of ordinary people quickly bought shares, driving up their price to unprecedented levels and punishing the hedge funds that bet against them. GameStop soon became the classic definition of a “meme stock,” or a stock whose value was driven more by social media enthusiasm than any kind of underlying financial metrics. The GameStop saga showed Wall Street traditionalists that coordinated small retail investors could have an outsized impact on the stock market.

See more information: Stupid money and GameStop’s complicated legacy

Interest in meme stocks waned after a few months, and Gill virtually disappeared from public life. In September 2023, her story was canonized in the Hollywood film Stupid money, in which he was played by Paul Dano. The film portrays Gill’s unwavering belief in his investments and his refusal to sell shares even when they were worth millions of dollars – because many other investors saw him as the leader of a movement and would only sell if he did so first.

Gill’s X account was inactive for almost three years. But on Sunday, a cartoon of a man sitting upright seemed to signal that he was once again ready to enter the investing fray and rally other traders for another mission. The image accumulated 14 million views and 77 thousand likes in 15 hours. The next morning, he posted several other pop culture memes, including of a resurgent Wolverine (Hugh Jackman) and Breaking BadWalter White (Bryan Cranston) growling“We’re done when I say we’re done.”

The GameStop company itself has not been performing very well. In March, GameStop reduced its workforce and reported lower year-over-year revenue in the fourth quarter as it faced continued competition from online retailers and weak consumer spending.

But its shares’ resurgence comes amid a larger spike in activity in meme stocks. Meme cryptocurrencies flipped significant trading volume in recent months, and jumped once again following Gill’s post. Other meme stocks also jumped, including AMC, which rose 22%, and Reddit, which rose 13%.

Speculative stocks typically see more activity when the economy is strong and people feel they have money to play with. Many participants in the WallStreetBets craze also felt they were waging a symbolic war against Wall Street and its control of the financial system. Many people have certainly made a lot of money. But whether the broader collective mission has been successful has been hotly debated. “The whole GameStop thing: they lost,” said Kyla Scanlon, an economic analyst and content creator. TIME last year. “It’s very difficult to beat the stock market.”