Meme Stocks Reborn: The Cryptic Signal That Sent Shares Soaring
A mysterious message from Keith Gill, aka Roaring Kitty, sent shockwaves through the US equity market, reigniting the flame of meme stocks. The online persona, who rose to fame in 2021’s meme-stock frenzy, posted a cryptic image on X, sparking a frenzy of speculation and trading activity.
GameStop and AMC Entertainment: The Original Favorites
Shares of GameStop Corp., one of Gill’s original darlings, surged as much as 14% before paring most of the gain to end the day up 5.9%. AMC Entertainment, another favorite from the same era, also erased some of its spike to close 5.9% higher.
Deciphering the Clues
Gill’s post featured a mock-up of a Time magazine cover, showcasing a blank computer screen with a media player resembling YouTube. The image appears to be an edited version of the December 25, 2006 issue, when “You” was named “Person of the Year.” With no accompanying text, traders were left to make their own connections. Some linked the “You” theme to Unity Software Inc., whose ticker symbol is U, sending its shares up as much as 8.2%. Others connected it to Clear Secure Inc., the operator of airport security systems, whose ticker symbol is YOU, causing its shares to pare earlier losses.
A Pattern of Influence
This is not the first time Gill’s posts have moved markets. In September, a similarly cryptic image of a dog inserted in a Toy Story movie franchise still caused a brief pop in meme shares. In June, shares of Chewy Inc. and Petco Health and Wellness Co. jumped after Gill posted a different photo of a cartoon dog on X. He later disclosed a 6.6% stake in July before dumping his entire position, according to an October filing with the SEC.
Market Excess and Speculation
The meme-style rally comes amid signs of excess in US financial markets. Bitcoin has surged past $100,000 for the first time, while stocks continue to set new records and credit spreads remain tight. Traders are becoming increasingly speculative, seeking out any hint of direction from influential figures like Gill.
Options Activity Heats Up
Thursday’s post from Gill triggered a flurry of options activity, with traders snapping up bullish call options on Unity, sending volume to the highest since September 24. The one-month call skew more than doubled from the previous day. Meanwhile, data compiled by Bloomberg show a trader made a multi-legged bet on Clear Secure on Wednesday, buying a $30/$40 call spread expiring in May and financing it by selling put options with a $20 strike and similar expiration.
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