(Bloomberg) — Animal spirits in the U.S. stock market rushed into a handful of meme stocks after a cryptic afternoon post from Keith Gill, the online persona known as Roaring Kitty who rose to fame in 2021’s meme stock mania.
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Shares of GameStop Corp., one of Gill’s original favorites in the January 2021 meme frenzy, rose as much as 14%, triggering a halt in volatility before paring most of the gains every other day by 5 .9% to end. AMC Entertainment, another darling of the era, also erased some of the peak, closing 5.9% higher.
The trader posted a mock-up of a Time magazine cover, showing a blank computer screen with a media player similar to YouTube. The image appears to be an edited version of the December 25, 2006 cover of Time, when “You” was named, as the American public was, “Person of the Year.”
With no accompanying text to provide clues to the message’s meaning, day traders made other logical leaps. The shares in Unity Software Inc. – ticker U – rose as much as 8.2% on the day, while airport security systems operator Clear Secure Inc. – ticker YOU – quickly erased earlier losses of 4.6%. Unity shares ended the day 4.9% higher, while Clear Secure fell 1.1%.
The meme-style rally comes amid increasing signs of excesses in US financial markets. Bitcoin rose above $100,000 for the first time as stocks set new records and credit spreads remain tight.
It’s the first X-post for Gill since September, when a similarly cryptic image of a dog in a still from the Toy Story film franchise caused a brief pop in meme shares. In June, shares of Chewy Inc. rose. and Petco Health and Wellness Co. after Gill posted another photo of a cartoon dog on X. He disclosed a 6.6% stake in July before dumping his entire position, according to an October filing with the SEC.
GameStop shares also rose in June as Gill planned a return to his YouTube channel, which became popular during the Covid-19 pandemic but fell after the subsequent livestream. Gill profited significantly in 2020 and 2021 from investments in the beleaguered video game retailer.
Gill’s post on Thursday set off a flurry of options activity, with traders snapping up bullish call options on Unity, driving volume to its highest level since September 24, while the one-month call skew more than doubled from from the previous day.
Meanwhile, data compiled by Bloomberg shows that a trader placed 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 a similar expiration date. The trade, which looked more like a hedge and less like a directional bet, helped push call volume and open interest on the stock to record highs.
–With help from David Marino, Elena Popina, and Bailey Lipschultz.
(Updates stock prices at market close)
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