GameStop meme trade's origins: Who is Roaring Kitty?

GameStop (GME) is back in the spotlight after trader Keith Gill, known as "Roaring Kitty" online, resurfaced with a post on X. Gill led the GameStop short squeeze in 2021, and following his online comeback, shares of the video game retailer soared nearly 80%. Yahoo Finance Head of News Myles Udland recaps the meme stock's frenzy and what to expect of Roaring Kitty this time around.

"There is a very clear momentum when a certain person — in this case, Keith Gill, also known as Roaring Kitty — speaks about a certain stock, in this case, GameStop. There is an impulse to buy it because of what has happened in the past," Udland explains.

Gill gave detailed breakdowns of GameStop's business back in 2020, telling Reddit users that the stock was undervalued. "He was a true believer way before there was any meme," Udland says. The resurgence of "Roaring Kitty" has already popped meme stocks as traders look to see what call Gill might make next.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

All right, let's bring in Yahoo Finance's Miles ler here for more so, Miles Keith Gill Roar and Kitty, he posts on X proper name for the, for the first time in a long time.

Right?

Gamestop rips.

What do you make of it?

This is, can I just say this is miles, like favorite subject?

And that's why I wanted Miles to go.

I know that.

But I miles miles and I lived through the first meme craze together and I saw how much joy it brought him to talk about this stuff, I think, still bring him joy.

I think the reason that I remain so drawn to business media is that it's, it's much more fun than most other media things that you can cover.

It's just not that serious.

Like there's a lot of money at stake and people know they try to assign seriousness to something.

Well, II, I mean, there is some seriousness when it's, you know, trillions of dollars and all this and it's people's retirement, et cetera, et cetera.

But the vast majority of that is spoken for in, you know, conservative time tested strategies all like an incredible amount of regulatory um you know, apparatus around that.

But there are these things that exist within markets.

The entire crypto market is basically this meme stocks are the equities version of it where I, I mean, it doesn't make like it actually makes complete sense.

I think people over intellectualize something that's pretty simple, which is that there's now huge amount of people aggregating their, you know, conversation on the internet, mostly on reddit.

In this specific case, it can be other places.

It could be the Yahoo finance message boards, it could be youtube comments section, et cetera, et cetera.

And there is like a very clear momentum when a certain person in this case, Keith Gill, also known as Warren Kitty speaks about a certain stock.

In this case, gamestop, there is an impulse to buy it because of what has happened in the past and because pretty much everyone who's involved with this knows it's a joke, but it's also up 80% today.

So you know, go for it.

There you go.

It's just money and just to be clear here, all of this was set off by a tweet that he tweeted.

He hasn't tweeted since June of 2021.

That is a picture presumably of him or of someone in a gaming chair leaning forward, leaning forward.

After sitting back for a couple of years, he's now leaning back forward.

And then that tweet, by the way was followed by like a bunch of mash up movie meme kind of tweets throughout the course of the day, one of them had the theme of run.

So, you know, Run II, I took it to be like, run stop.

The stock is gonna keep running or it's been on a run and it will continue running.

Um Also, let's not forget, like Keith jumped onto the scene with a series of extremely earnest and detailed uh fundamental breakdowns of gamestop's business in the summer of 2020 when literally no one was paying attention to it.

It was like, I mean, I don't even know, split, adjusted what it was at this point.

It was a single digit dollar stock and he's like, it's definitely worth way more than that.

And who knows what he's done with his portfolio, right?

Like the Cynics in us could say he went out and bought a ton of short dated calls this morning and then he sold them all and he's made all his money and jokes on everybody else.

But he is, he was a true believer way before there was any meme.

He literally just liked the stock as he put into the official record when he testified before congress.

So your point being miles maybe just see this as what it is to a lot of people, which is, which is fun, which is entertainment, which is Dave Portnoy.

Now jumping in and he's posting about it.

Portnoy will be the first one to tell you I'm not an investor.

I'm a gambler.

Yeah.

And, and, and I think also like as Jared was, was outlining for us, there has been this energy within the market of pockets of enthusiasm, pockets of risk on.

I think the more serious versions of it is, look at what we've seen with Chinese internet stocks over the last month.

They have ripped hire.

Look at what's happened with utilities over the last month they have ripped hire.

There's a lot of energy in markets right now.

You know, coming back to a more serious tone, uh, for people seeing mag seven goes up, that group has divided away.

But there's this sense of if rates are going to go lower over the next, you know, year or whatever, uh, equities are probably gonna be a beneficiary of that.

What isn't played out and we've seen that money move around.

Um, and maybe you could make the argument that if the meme stocks have been dormant for some time, maybe that's not played out.

I mean, a MC ultimately was the more mem meme stock than Gamestop, right?

And that stocks up more today, which I think tracks like a MC is the real play thing.

Gamestop, like has a more real business I would say than A MC does.

Yeah, I mean, you know, uh, well, speaking real business, I was looking at the numbers for, uh, Gamestop in terms of what's happened to its sales over the past few years.

I mean, last year its net sales were about $5.3 billion.

Its net income was $6.7 million.

But if you look at the chart of the trajectory for either its sales or its income over the last few years, you know, it's been down to the right.

It has not been a good trajectory.

But, you know, you have like how much of this is just, it's fun.

People are having fun.

I think, I think I, and I think gamestop is more fun because if you look at what the management at A MC has done over the last two years, it's actually not that fun.

Uh They've like explicitly built all the shareholders who piled into the thing.

They got this weird, you know, the ape share structure that got folded back at A MC.

Everybody loses a ton of money, the CEO gets paid a ton of money.

He says, don't worry, I'm not actually having the money but like he does because he unloads all the stock.

That's not really that fun.

That's a very cynical and dark story.

I think within markets, I think gamestop while Ryan Cohen has his issues and he doesn't talk to anybody.

It's management's prerogative not to host an earnest call that's open to analysts.

Um and a lot of analysts, you know, kind of stop covering these companies too, especially gamestop, right?

They gave up on it.

Um So I wouldn't say, you know, Gamestop all like, you know, roses and sunshine, but it doesn't quite, to me have, um, some of the, I don't know, like the, the slickness that has gone on at a MC.

Oh, interesting.

I mean, I'm not the only person saying this, this is a, this is a, this is a, this is a broad take.

I think if you look at the, the machinations that have happened at that company.

Well, Miles Sud, I'm glad to see the gleam in your eye when we discuss these issues.

Hey, thank Keith G. The only thing is this will be over tomorrow probably.

And then we'll just, we'll, it'll be, you know, let's hold this preview.

CP I and then we'll react to CP I and then we'll discuss, you know, next week's in video earnings.

That's why the meme stock is trade is so fun because it is an actually fun thing in a, you know, day in, day out kind of grind through stocks that, you know, can, can feel a little grinding.

Yeah, it can, it can.

Well, this is a little ray of sunshine.

Thanks so much.

Miles.

Appreciate it.