GameStop’s Roaring Kitty Makes Massive Stake Claim, Shares Soar: Is This Legal?

New York, USA – GameStop, a popular meme stock, is experiencing a surge once again after an influential social media post from an investor known as “Roaring Kitty.” The post, shared on Reddit, suggested that the investor had acquired a significant stake in the video game retailer.

Shares of GameStop opened for trading on Monday at over $40 each, representing a more than 70% increase from the previous Friday before slightly pulling back. This sudden rise was fueled by a screenshot shared by the Reddit account associated with Keith Gill, indicating ownership of 5 million GameStop shares, nearly 2% of the company’s stock, valued at over $100 million.

The authenticity of the post has not been verified as neither Keith Gill nor GameStop has responded to requests for comment. Keith Gill gained prominence in 2021 for rallying online investors to support GameStop, leading to a surge in the company’s shares and creating financial pressure on Wall Street firms that had bet against the retailer.

Other meme stocks, including AMC and Blackberry, also experienced an uptick on Monday, despite their stock movements seeming disconnected from the businesses’ fundamentals. Analysts suggest that the initial rise of meme stocks was driven by increased savings and spare time during the pandemic, thanks to government support programs and restrictions on in-person activities.

With the resurgence of markets this year, trading platforms like Charles Schwab and Robinhood have reported a rise in new accounts and activity by retail investors. GameStop capitalized on this interest by raising $933 million in a recent share sale.

However, the frenzied trading activity has raised concerns within the financial industry and in Washington, prompting hearings on the GameStop phenomenon in 2021. Former SEC Chair Jay Clayton criticized the behavior, likening it to gambling and questioning its place in the market.

The ongoing interest in meme stocks and the implications for traditional finance continue to spark debates and regulatory scrutiny within the industry. Despite the controversies, the GameStop saga serves as a testament to the power of social media and retail investors in shaping the financial landscape.