GameStop and AMC Plunge as Roaring Kitty Meme Stock Craze Fades

The magic meme stock craze revival appeaers to be fading hard for GameStop and AMC.

GameStock (GME) was trading 15% lower than its Wednesday afternoon closing price just before markets opened on Thursday. After the bell, the stock sank as low as $31.91—down 18%—before rebounding.

At the time of writing, GameStop shares are trading for $33.38—down 16% from its previous close.

Meanwhile, AMC isn’t faring much better. Shares for the movie theater chain started the day trading 8% lower than their Wednesday closing price as markets opened in the U.S.

The meme stock moniker comes from the fact that the share price of both GME and AMC has been heavily influenced by social media. In this case, it’s specifically referring to stock influencer Keith Gill—better known on Twitter and YouTube as Roaring Kitty and on Reddit as DeepFuckingValue. Back in 2021, he featured prominently in the GameStop short squeeze. But for the past three years, all his social media accounts have been silent.

He appears to have made a return, but there’s a bit of skepticism surrounding it. So far, his return has only taken the form of images and video clips posted on Twitter without much explanation. The latest: An edited clip from the 1994 Academy Award-winning film, “The Shawshank Redemption.”

pic.twitter.com/y4Cbh1Nbpc

— Roaring Kitty (@TheRoaringKitty) May 16, 2024

The latest tweet is a little less cryptic than earlier offerings. It uses text overlays to rewrite the screenplay so the daring prison escape of Andy Defresne instead refers to “Old Kitty,” and the muddy set of Reddit posts, bunch of tweets, and an old live stream that were left after he disappeared from social media in 2021.

Roaring Kitty’s reemergence has made GameStop and AMC shares incredibly volatile. In the past four days, the Nasdaq’s volatility circuit breakers have automatically halted GME trading 32 times and AMC trading 26 times, according to NasdaqTrader.

All that volatility has been profitable for a handful of traders. Just yesterday a whale who bought $908,000 worth of GME options in April managed to sell them and make a $44 million profit. And at least one hedge fund, Renaissance Technologies, managed to nab more than 1 million shares worth of GME before this week’s rally.

Robinhood, a U.S.-based stock and crypto trading app, saw $5 billion worth of trading in one day, making it “one of our biggest days in the past 12 months,” Robinhood CEO Vlad Tenev said on Twitter. For reference, the company averaged $2.7 billion worth of trading per day in March.

Edited by Andrew Hayward

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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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