Meme Stock Mania Returns: GameStop and AMC Surge as 'Roaring Kitty' Revives Social Media Frenzy

This is a trend driven by entertainment rather than company fundamentals, stocks which rocket up on pure speculation, tend to drop back down to earth very quickly.

Shares of GameStop and AMC rose slightly during volatile premarket trading on Wednesday, continuing a recent surge initiated by the return of Keith Gill, also known as "Roaring Kitty," a key figure in the 2021 meme stock craze.

AMC, the cinema chain, saw a 6.4% increase, following a 135% rise over the previous two sessions. GameStop, the video game retailer, climbed 6%, reaching its highest level since June 2021 on Tuesday. Both stocks, favored by retail investors, briefly dipped into negative territory and were the most actively traded on the NYSE at 5:45 a.m. ET.

On Tuesday, Gill, under his online persona "Roaring Kitty," posted a clip from the movie "Braveheart" on the social media platform X, featuring the word "GameStop" flashing on the screen as Mel Gibson's character, William Wallace, shouts "freedom." This marked Gill's first mention of a company name since his return to X after a three-year hiatus, reigniting enthusiasm for meme stocks reminiscent of the 2021 retail trading frenzy. Gill's reappearance has stirred speculation in online forums about his intentions, although he has not responded to requests for comment from Reuters.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that the trend is driven more by entertainment value than by underlying company fundamentals. She emphasized that stocks fueled by speculation tend to experience rapid declines.

“This is a trend driven by entertainment rather than company fundamentals, stocks which rocket up on pure speculation, tend to drop back down to earth very quickly.”

Vlad Tenev, CEO of the retail trading platform Robinhood, reported that the app reached $5 billion in equities trading volume on Tuesday, one of its highest volumes in the past year. Meanwhile, billionaire investor Bill Gross, formerly dubbed the "Bond King" for his role in founding the fixed-income giant PIMCO, described the meme stock trading frenzy as "opportunistic." He outlined his strategy as focusing on selling options with 400% annualized volatility.