Game Stop Short Sellers Lose Nearly $1 Billion As GME Bumps On Roaring Kitty Trade

The online return of Keith Gill, also known as Roaring Kitty, is moving the markets once again.

In the year The meme stock influencer who rallied traders to make a big bet with Wall Street through GameStop in 2021 posted several positions in the video game retailer on Reddit this weekend. Pushing the value above $200 million, the estimated exposure includes stocks and stock options.

The news sent retailers into a frenzy. Shares of GameStop rose more than 70% to $39.69 in premarket trading. According to Weird Wells, the increase in neck breakage is set to cost short sellers $993 million in losses.

Short sellers are traders who bet that the price of an asset will fall. By borrowing and selling the property instantly, they buy the property at a low price and pocket the difference, hoping to make a profit in the future. But a jump in asset prices can undermine short sellers' bets if they are forced to buy assets at higher prices to close out their positions – creating something called a short squeeze.

Shares of GameStop popped last month after Gill's account was posted on Twitter (aka X) for the first time in years. Amid a flurry of cryptic posts, most of which focused on movie references, GameStop's share price nearly tripled — to $48.75 per share in just a few days.

Already today, like the last time Roaring Kitty was back, business is at a standstill. On the Nasdaq, GME was halted a minute after markets opened due to volatility. A few minutes later, AMC Entertainment Holdings (AMC), which trades on the Nasdaq and is a meme stock in its own right, stopped for the same reason.

But it's not limited to those two so-called meme stocks. NYSE trading has halted—mostly citing limit-limit rules aimed at curbing extreme market volatility. It is unclear whether the wider trade disruptions are linked to the GME trade chaos.

GameStop stock has so far paled in comparison to the historic short squeeze that sent the video game retailer's shares up to $120.75 in 2021. At the time, Gill was active in the Reddit community, WallStreetBets, where he posted regular updates on his trades.

Instead of the aforementioned group, Gill posted a “GME YOLO Update” to the Reddit community SuperStunk. In the year The site has become a hangout for users to discuss GameStop after tensions erupted on WallStreetBets with panelists over frequent mentions of the stock in 2021.

That sentiment was echoed in Wall Street Beats on Monday, as moderators pointed out that GameStop wanted to discuss the direction of “Monkey Sub.” With more than a million members, the Reddit site showed 15,000 users were watching SuperStone, as of this writing.

Under the username DeepFuckingValue, Gill's so-called positions netted the influential $6.8 million on paper. In addition to holding call options worth $65.7 million for GameStop, the stock adds to the bet—Gill's account shows he holds $116 million in shares.

“Guess who's back,” commented one Reddit user, while another highlighted the unprecedented nature of Gill's post in the Gamestop-oriented community.

Although Gill's online reappearance generated a noticeable interest in GameStop Online, it wasn't the only effort. On Monday, when markets opened, GameStop's price immediately dropped to $32.90. Still, the stock is up 87 percent in the past month.

Edited by Stacy Elliott.