GameStop surges after ‘Roaring Kitty’ account claims stake

Meme stock favorite GameStop is surging again, after a social media post by an investor known as “Roaring Kitty” claimed a large stake in the video game retailer.

The company’s shares opened for trading on Monday at more than $40 per share, a rise of more than 70% from Friday, but later fell slightly.

The surge came after a screenshot was shared by a Reddit account linked to Keith Gill, claiming he owned 5 million shares of GameStop – around 2% of the firm’s stock – worth more than $100 million (£78 million).

The post was one of a series made in recent weeks, following a long period of silence on the part of Roaring Kitty accounts.

The authenticity of the post could not be confirmed. Neither Mr. Gill nor GameStop responded to emails seeking comment.

Mr. Gill became famous in 2021 for inspiring an army of online investors to support GameStop.

That led to an unexpected surge in the struggling company’s shares, putting financial pressure on professional Wall Street firms that had bet against the retailer.

A post from that year showed that Mr. Gill owned about 200,000 shares, worth $30.9 million.

Shares of some other so-called meme stocks — whose fluctuations appear unrelated to business fundamentals — also rose on Monday, such as AMC and BlackBerry.

Analysts had argued that the original rise in meme stocks was driven by the increased savings and time many households had during the pandemic, thanks to government assistance programs and the closure of many in-person activities.

As the market rebounded this year, trading firms such as Charles Schwab and Robinhood have reported a surge in new accounts and activity from retail investors — people who don’t work for investment houses or other private firms.

GameStop earned interest after raising $933 million in a share sale last month.

But this activity has been the source of some disquiet in the financial industry and in Washington, which hosted hearings on the GameStop phenomenon in 2021.

In an interview with business broadcaster CNBC last month, former financial regulator Jay Clayton, who led the Securities and Exchange Commission under former President Donald Trump, compared it to gambling.

“This bothers me on so many levels,” he said. “It’s closer to gambling than trading, and it’s certainly not investing.

“Is this something we should tolerate in our markets?” he asked.

“Whether it’s legal or illegal, I don’t think so.”