Why GameStop’s resurrection could indicate another meme stock hysteria?

GameStop (GME) stock price skyrocketed by more than 70% on Monday morning.

A single meme was the catalyst for another rabid surge in the stock price of the video game store, according to Time.

On Sunday evening, Keith Gill, who is kind of a digital folk hero to many amateur investors, posted an image of a man bolting upright in his chair on X.

Back in 2021, he was one of the major catalysts of the WallStreetBets craze via Reddit and YouTube.

His return coupled with other rising “meme stocks” suggest that the US is yet again in the midst of another period of meme stock frenzy.

This happens when small-scale investors rally together to push the stock market in unpredictable ways.

On Monday, GameStop’s shares passed $36 briefly, the highest since August 2022, and were stopped on multiple occasions due to volatility. Meanwhile, GameStop was top trending in both Google and X.

In 2020, Gill earned fame over his stock market advice on YouTube and the subreddit, Wall Street Bets.

There, he had advised fellow investors to buy GameStop shares, believing that they were undervalued.

Some major Wall Street institutions, on the contrary, were betting on GameStop to fail, as less and less people went to physical stores to buy video games and bought online.

However, a dormant online community rallied around Gill’s hypothesis, hyping GameStop with memes and posts.

Millions bought shares, pushing its price to unimaginable heights and punishing the hedge fund investors.

GameStop in a matter of days became the textbook definition of a “meme stock,” or a stock whose value was determined by social media enthusiasm as opposed to any underlying financial metrics.

The GameStop saga brought Wall Street to its knees and proved to traditionalists that coordinated small-scale retail investors could have a huge impact on the stock market.