We in the financial press tend to talk about the meme stock revolution (or craze, or frenzy, or mass delusion) in the past tense. It was a 2021 phenomenon — the climax of a zero-interest rate-fueled euphoria that pit Robinhood hobbyists against Wall Street's elite, a financial David vs. Goliath, etc.
If you can't remember how the whole thing ended, that's partly because it never really did. And now the ride-or-die diamond-handed GameStop crowd is trying to get the band back together.
See here: On Monday, after three years out of silence, one of the orchestrators of the 2021 GameStop surge roared back into the spotlight with a wordless meme on X that his followers interpreted as a rally cry for the stock he put on the map.
The account is linked to Keith Gill, aka Roaring Kitty, aka DeepF—ingValue.
From that single, cryptic post depicting a man sitting in an office chair — a meme that suggests "when things get serious" — GameStop shares soared more than 100% before being halted for volatility. The stock ended Monday up more than 70%, rising $13 to $30.45 a share.
"No fundamental investors are involved in this," Steve Sosnick, chief strategist at Interactive Brokers, told me. "The fundamentals didn't make sense at $9 a share, they don't make sense at $30 a share. But for those who've been awaiting the next signal, it arrived."
Why now?
While we don't know why Gill, who didn't respond to requests for comment, chose to emerge from the shadows today, it's clear the timing was ripe for another surge.
Another meme stock, Trump Media and Technology Group, the Donald Trump-owned media company that controls Truth Social, brought back memories of the 2021 GameStop bonanza. Then, a team of amateurs on Reddit collectively stuck it to the man by squeezing traders who had short interest (bets that the stock would fall) on GameStop, AMC, Bed Bath & Beyond and others.
With Trump Media, Trump supporters and other speculative traders pumped up the stock not for its (extraordinarily lousy) fundamentals, but more as a vote of support for the former president's campaign and even a barometer of his winning chances. The stock, which has surged nearly 200% this year, has been extremely volatile, rising and falling rapidly depending on the whims of the day.
Back in 2021, the meme stock emerged for the first time out of a collision of macro forces: An unprecedented mix of pandemic-era cheap money, boredom, social media, and the widespread adoption of free trading apps to dabble in equity markets.
We're not quite as exuberant today as we were then, but we're still within spitting distance of all-time highs on major stock indices, Sosnick notes.
In some ways, the arrival in the spring of Donald Trump's media company reawakened the meme stock monster.
"If I were Roaring Kitty in the crowd, seeing what happened to DJT," Sosnick says, "it may have made a lot of them think, 'Oh wait, maybe we can get the band back together."
The water is warm, and day traders may be spoiling for a fight, especially if they're among the legion who caught the 2021 wave too late.
Michael Pachter, a managing director at Wedbush Securities, told me that the difference between the 2021 craze and now is that the David of the story no longer has a Goliath like Melvin Capital, Gabe Plotkin's hedge fund, which ran itself into the ground shorting GameStop.
"I don't think that the people who are short the stock are as adamant" as Plotkin, who "had more conviction than money," according to Pachter.
