‘Meme Stock’ Momentum: Is The GameStop Buzz Legit Or Potentially Illegal?

Wall Street has been a hotbed of volatility as uncertainty swirls throughout the broader economy. But it’s not just inflation, interest rates, and a possible recession that fuel the market shifts we’ve seen lately.

Listen to the roar

You might have heard the term “meme stock” bandied about over the past couple of years, and the impact on the prices of such shares can be rapidly boosted as a result. Essentially, the concept boils down to one or more influential social media users encouraging investors to buy shares of a particular company’s stock, thus inflating its value — at least on paper.

And one name has become synonymous with the movement: Roaring Kitty. That’s the handle used by Keith Gill, whose 1.4 million X followers can alter the direction of stocks based solely on his sometimes cryptic posts.

After a lengthy drought on the platform, Roaring Kitty began posting again a few weeks ago. As a result, GameStop (the mother of all meme stocks) surged by 74.4% in one day and added more than 60% the next.

Days later, Roaring Kitty revived his Reddit account with a batch of screenshots that pushed GameStop shares even higher.

A legal gray area

Roaring Kitty has been a driving force behind GameStop’s against-all-odds Wall Street rally for years. While there’s been lots of stock value generated as a result, skeptics say it’s all a facade — and some believe Gill might even be skirting the law in his bid to make others (and himself) richer.

A former Securities and Exchange Commission prosecutor said the agency might be interested in investigating the posts, but any charges would hinge on being able to prove that Gill was actually the person who published them and that he did so to mislead investors so he could profit.

Chris Agee June 7th, 2024

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