Keith Gill, the online persona “Roaring Kitty” who ignited the 2021 meme stock craze, recently posted a cryptic image on X (formerly Twitter), sending shares of GameStop Corp. and AMC Entertainment Holdings Inc. soaring. The enigmatic post, a mock-up of a Time magazine cover featuring a blank computer screen and media player, ignited speculation among day traders, triggering a surge in trading activity.
GameStop, a focal point of the 2021 meme stock frenzy, saw its shares jump as much as 14% before settling with a 5.9% gain. AMC Entertainment, another favorite from that era, also experienced a similar surge, closing 5.9% higher. The lack of context surrounding Gill’s post fueled speculation, leading traders to draw connections to various companies based on perceived clues.
Shares of Unity Software Inc. (ticker symbol “U”) rose as much as 8.2% intraday, ultimately closing 4.9% higher. Clear Secure Inc. (ticker symbol “YOU”), which operates airport security systems, briefly erased earlier losses but ended the day down 1.1%. The sudden surge in meme stock activity comes amidst broader signs of exuberance in the US financial markets, with Bitcoin recently surpassing $100,000 and stock markets reaching new highs.
Image: Mockup of Time Magazine cover resembling the 2006 “Person of the Year” issue, posted by Keith Gill on X.
This isn’t Gill’s first foray into cryptic posting. In September, a similarly ambiguous image featuring a dog from the Toy Story franchise caused a brief spike in meme stocks. In June, shares of Chewy Inc. and Petco Health and Wellness Co. jumped after Gill posted a picture of a cartoon dog. He later disclosed a 6.6% stake in Chewy in July before divesting his entire position in October, according to an SEC filing. GameStop shares also experienced a temporary surge in June when Gill announced his return to YouTube, only to fall after the subsequent livestream. Gill significantly profited from his GameStop investments in 2020 and 2021.
Thursday’s post triggered a flurry of options activity, with traders snapping up bullish call options on Unity. Trading volume reached its highest level since September 24th, and the one-month call skew more than doubled from the previous day. Data compiled by Bloomberg reveals a trader placed a multi-legged bet on Clear Secure on Wednesday, buying a $30/$40 call spread expiring in May and financing it by selling put options with a $20 strike and a similar expiration date. This trade, resembling a hedge rather than a directional bet, contributed to record-high call volume and open interest for Clear Secure.
Image: Illustrative chart depicting typical stock price volatility in meme stocks like GameStop and AMC.
The resurgence of meme stock volatility underscores the continued influence of social media and online personalities on market dynamics. While the long-term implications of this latest episode remain uncertain, it serves as a reminder of the potential for rapid and unpredictable price swings in certain segments of the market. Investors should exercise caution and conduct thorough due diligence before engaging in trading activities related to meme stocks.
