A cartoon about X just sent GameStop shares up 68%

new York
CNN
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The surprise return to social media of the trader who helped spark the 2021 stock meme frenzy sent GameStop shares soaring on Monday. This surge had nothing to do with the fundamentals of the struggling company – and everything to do with a cartoon of a gamer that the trader, nicknamed Roaring Kitty, shared on X.

GameStop shares jumped 68% Monday after account managed by Keith Gill shared a meme about, marking his first position in three years. Shares soared more than 110% earlier and were halted several times due to volatility Monday morning.

Short sellers recorded $1 billion in mark-to-market losses on Monday while betting against GameStop, according to data firm S3 Partners. Short sellers aim to make a profit on a stock by borrowing shares, selling them, and returning them after purchasing them at a lower price.

Shares of trading platform Robinhood, which suspended purchases of GameStop, AMC Entertainment and other meme stocks during the 2021 frenzy, rose 7%. AMC shares jumped 31%. Reddit shares soared 13%.

The image posted by Gill depicts a man leaning forward in a chair with a video game console in his hand. GameStop had posted the same cartoon in February, but with a red arrow and a chair. In Gill’s cartoon, they are blue. The meme is interpreted to mean “when things get serious,” according to Know Your Meme.

Gill did not immediately respond to CNN’s request for comment.

GameStop shares have triggered several circuit breakers – a temporary, mandatory halt to trading to allow investors to calm down a bit. Robinhood on Monday denied claims on social media that it had once again halted purchases of GameStop stock on its platform.

“This is an error. Robinhood has not stopped purchasing Gamestop shares,” Robinhood spokesperson Anupriya Ghate said in a statement to CNN. “GME is experiencing high volatility and movement, which which triggers market-wide trading limits and halts. These apply to the entire market and are not specific to Robinhood.

Gill, who goes by “Deepf—-ingvalue” on Reddit, was one of the main forces behind the WallStreetBets subreddit that generated eye-popping returns on GameStop stock. Traders bid on the retailer’s shares by targeting short sellers.

Retail investors have sent other stocks soaring in 20221, including AMC Entertainment and Bed Bath & Beyond. They are now collectively known as meme stocks, or stocks of cult companies that swing widely based on their popularity among trading communities on social media rather than their fundamentals.

Gill described himself as a casual day trader while testifying at a 2021 congressional hearing on the GameStop mania. He said he didn’t aim to fuel the GameStop frenzy and instead believed the stock presented an attractive opportunity for investors.

“The notion that I used social media to promote GameStop stock to unwitting investors is absurd,” Gill said in written testimony. “I have made it clear that my channel is for educational purposes only. …Whether other individual investors bought the stock was irrelevant to my thesis.

Gill also said he first bought GameStop stock, and then call options, in the summer of 2019, when the stock was trading around $5 apiece. He strengthened his position during the rest of the year and into 2020, and said he believes “the market remains oblivious to the unique opportunity in GameStop.”

But even he didn’t believe the stock would hit a 2021 high of $483.

“At the time, I thought it was possible but the probability was very low,” Gill testified.

Gill was a main character in the 2023 film “Dumb Money” (played by actor Paul Dano), which depicted the events leading up to and during the GameStop short squeeze.

This story is developing and will be updated.