(Corrects headline to show highest since 2021, not 2021 high)
By Medha Singh
(Reuters) -Retail darlings GameStop and AMC soared on Tuesday, as posts from “Roaring Kitty” Keith Gill raised chatter about the return of the central figure behind the 2021 meme stock frenzy.
Shares of the video game retailer jumped 70% to its highest level since June 2021, while those of the world’s largest theater chain surged 90% amid multiple trading halts due to volatility.
The rally began in the previous session after Gill shared a meme and more than 10 clips from movies, including “X-Men Origins: Wolverine”, “The Avengers” and 1993 Western “Tombstone”.
Even though the posts did not mention company names, GameStop and AMC were the most-traded stocks by retail investors on Monday and Tuesday as of 10:30 a.m. ET, J.P.Morgan data showed.
That was mainly because Gill, who is returning to social media platform X after a gap of nearly three years, is credited with sparking the so-called Reddit rally in January 2021 with bullish calls on GameStop.
“The fact that Roaring Kitty is back should be totally meaningless to the stock market (but) the fact that it isn’t is fascinating,” said Matthew Tuttle, CEO of Tuttle Capital Management.
GameStop’s shares have nearly tripled in value since Friday’s close, with its market capitalization jumping to $16 billion.
Short sellers have lost $1.6 billion on paper on Tuesday, taking combined losses since Monday to $2.4 billion, analytics firm Ortex Technologies said.
“Today’s losses will put a lot of short sellers on tilt and squeeze them out of their positions with their buy-to-covers pushing GME’s stock price even higher,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
Meanwhile, AMC completed a $250 million share sale at the market price on Monday as its stock surged 78% to $5.19, more than double from a record low hit in mid-April.
The frenzy also spread to shares of micro-cap companies.
Headphones maker Koss, U.S.-listed shares of BlackBerry and food storage container company Tupperware rose between 15% and 30%.
Shares of…
..