Several "meme" stocks were making big gains again on Tuesday after the man credited with the stock craze returned to posting on social media after a three-year absence.
Among the so-called meme stocks are GameStop, AMC Entertainment, BlackBerry and Koss Corp.
Keith Gill, better known as "Roaring Kitty," started a social-media frenzy around several beaten-down stocks during the pandemic. He often posted memes and short videos about the companies that went viral.
He convinced people that big funds were rooting for the collapse of the companies in an effort to cash in on their demise.
Video game store GameStop was struggling back in 2021 when Gill and others sought to boost the company's stock price.
The stock price rose as high as $120.75 in January 2021.
The hedge fund Melvin Capital, which was betting on GameStop losing value, suffered massive losses. It had to turn to other hedge funds for nearly $3 billion in financing, BankRate reported.
Gill was eventually called to testify before Congress about his role in the stock craze and any possible market manipulation.
Later that year, his "Roaring Kitty" account went silent.
GameStop hit a three-year low of $9.95 last month and "Roaring Kitty" is back.
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
After several posts on Sunday and Monday, GameStop's stock price was hovering around $53 on Tuesday morning.
Other meme stocks like the theater chain AMC were also getting a big boost.
Most of the buyers appear to be small investors. A CNBC reporter noted that most of the recent trades that have driven the prices higher are around 100 shares, which is generally a much smaller number than major investors traditionally trade.
It was unclear if "Roaring Kitty" had purchased shares before Sunday's post in an effort to quickly profit from a skyrocketing stock price.
While GameStop's stock price has risen, its business model remains under pressure.
It posted revenue of $1.79 billion for the fiscal fourth quarter, compared with $2.23 billion in the same quarter a year earlier, CNBC reported.
There are some big differences in the market now from when the meme stock craze first started.
People were trapped at home during the pandemic and had extra money due to government stimulus checks. Interest rates were near zero, making loans very cheap.
Interest rates have surged since then and most of the pandemic savings have been depleted.
