Roaring Kitty's Social Media Post Triggers 74% GameStop Surge, Costing Short Sellers $1bn

The unexpected return of "Roaring Kitty," the online persona of Keith Gill, on social media ignited a massive spike in GameStop’s stock price, causing short sellers to incur significant losses nearing $1bn, according to a report by CNBC, which referenced data from financial analytics firm S3 Partners.

Gill, who famously orchestrated the GameStop short squeeze in 2021 by rallying a group of retail investors to buy up shares of the video game retailer, causing chaos for hedge funds and institutional short sellers, took to social media once again. This time, he shared a seemingly innocuous image on platform X, depicting a gamer leaning forward in a chair, which quickly became a catalyst for another sharp rise in GameStop’s share price. The stock soared by an incredible 74%, triggering a wave of losses for short sellers to the tune of $838m within a single day.

As of Monday, the total losses for short sellers in GameStop have exceeded $1.24bn for the month of May alone, with S3 Partners reporting that short positions are weighing heavily on the stock.

Ihor Dusaniwsky, Managing Director at S3 Partners, suggested that short covering could soon take place, emphasising that the stock had already earned a perfect 100/100 score for a potential squeeze prior to the latest rally.

Further complicating the situation, data from FactSet showed that the current short interest in GameStop now stands at over 24% of the company's float—the portion of the company’s shares that are freely available for trading. This elevated short interest, combined with the unexpected volatility and the renewed attention surrounding the stock, suggests that GameStop could remain a focal point for speculative trading, making it a highly volatile asset for both short sellers and retail investors alike. As these losses mount and trading activity intensifies, many are left wondering whether the stock's unpredictable fluctuations will continue or if a more sustained trend will emerge.