The buzz around meme stocks reignited on Friday when Keith Gill, widely known as “Roaring Kitty,” made a cryptic post on X (formerly Twitter). Gill, who played a key role in the meteoric rise of GameStop shares during the 2021 meme-stock frenzy, has returned to social media after a two-month hiatus. His unexpected post sparked fresh speculation, causing shares of both GameStop and AMC Entertainment Holdings to rise.
The Cryptic Post: What It Could Mean
Gill’s post featured a still from the popular animated movie “Toy Story 2,” showing the character Woody being dropped by his owner, Andy. This particular scene, which has gained traction as a meme, is often interpreted as a metaphor for abandonment. In the post, Woody’s face was superimposed with an image of a dog, a reference to Gill’s last post in June. This ambiguous message left many investors and followers speculating about its significance.
— Roaring Kitty (@TheRoaringKitty) September 6, 2024
Some believe the post hinted that Gill might be moving away from his investment in Chewy (CHWY), an online pet retailer he had shown interest in earlier this year. Chewy shares experienced a brief decline of about 3% before recovering. Meanwhile, GameStop and AMC shares both saw significant rises, reflecting renewed investor interest in meme stocks.
GameStop’s Earnings Around the Corner
The timing of Gill’s return to social media couldn’t have been more strategic. GameStop is set to report its second-quarter earnings soon, which has generated even more interest in the stock. Despite the buzz, analysts expect a challenging report for the video game retailer. Forecasts indicate a decline in revenue and a wider net loss, driven by the gaming industry’s ongoing shift towards digital sales and subscription models.
According to analysts from Wedbush, GameStop faces “a near insurmountable barrier” to its planned return to growth. They argue that the company has yet to outline any clear strategy for entering new categories with growth potential. Despite these concerns, the stock remains a favorite among meme investors, largely due to its connection with Gill and other high-profile retail traders.
A Meme Stock Resurgence?
GameStop shares jumped by about 6% on Friday, their biggest gain since the end of August. Although the stock later pared some of these gains, the surge demonstrated the continued influence of “Roaring Kitty” over the market. AMC, another meme stock darling, also saw a rise of around 5%. Both companies were central to the 2021 meme-stock movement, when retail investors banded together on platforms like Reddit’s WallStreetBets to send these stocks soaring.
BREAKING: Roaring Kitty has posted this picture, after not tweeting for two months, suggesting possibly dropping Chewy, $CHWY.
Literally before it, someone put $2 million on GameStop, $GME, calls. $GME is up.
Unusual. pic.twitter.com/YeHEI2h4pM
— unusual_whales (@unusual_whales) September 6, 2024
Gill’s influence over these stocks cannot be understated. His initial involvement with GameStop in 2021 not only triggered a market frenzy but also led to broader discussions about the power of retail investors in challenging institutional short-sellers. His latest post, though cryptic, has once again stirred the waters, reminding investors of his role in this movement.
Speculation Around Chewy
While Gill has been synonymous with GameStop, his interest in Chewy earlier this year added a new layer of intrigue. In June, he posted a similar cryptic image that led many to believe he had shifted his focus to Chewy. Subsequent reports confirmed that he held a significant position in the company, owning over 6% of Chewy stock by early July.
Friday’s post has led some to speculate that Gill might be signalling a shift back to GameStop, potentially dropping his Chewy investment in the process. While Chewy shares fell slightly on Friday, they managed to recover later in the day. It remains unclear whether Gill plans to continue his investment in the pet retailer or shift his focus entirely back to GameStop.
A Polarizing Figure in the Market
waiting for the roaring kitty tweet pic.twitter.com/BVdIUl0Ar3
— wallstreetbets (@wallstreetbets) September 6, 2024
Gill’s return to social media has reignited conversations about the impact of meme stocks on the broader market. Critics argue that the meme-stock phenomenon is unsustainable, driven by speculation rather than solid fundamentals. For instance, Wedbush analysts maintain an “underperform” rating on GameStop, pointing to the company’s challenges in adapting to a rapidly changing gaming industry.
On the other hand, supporters of the meme-stock movement view Gill as a champion of retail investors, demonstrating the power of individual traders in shaping market trends. His cryptic posts, livestreams, and sporadic appearances have turned him into a cult figure among a certain segment of investors who continue to follow his moves closely.
What’s Next?
With GameStop’s earnings report due soon, all eyes are on the company’s performance and Gill’s next move. While analysts remain skeptical about GameStop’s future, meme stock enthusiasts are holding onto hope that Gill’s involvement will once again push the stock higher. The same can be said for AMC, another meme stock that continues to attract attention despite the challenges facing the movie theater industry
