Shares of Blackberry, Virgin Galactic, and Koss are surging as the return of "Roaring Kitty" triggers a new meme stock rally
The meme stock comeback has begun. It’s not just GameStop $GME and AMC stock that are enjoying meteoric rises. Many other meme stocks that once had cult followings have been revived this week following the social media reappearance of Keith Patrick Gill, the investor known as “Roaring Kitty.”
Roaring Kitty is the guy who was primarily behind the GameStop saga in 2021. On Sunday, he posted a picture on X $TWTR showing a gamer leaning forward in the chair, indicating intense focus — and prompting speculation among followers that he’ll return to Reddit $RDDT. The tweet had been viewed by more 24 million people as of Tuesday morning.
Meme stocks refer to company shares that become wildly popular online and are traded feverishly by retail and individual investors, sending prices soaring regardless of the company’s actual operating results or prospects.
And GameStop isn’t the only meme stock having a moment.
Virgin Galactic, a pioneer in space tourism and travel, soared more than 33% Tuesday morning due to the meme stock rally. The company, founded by Richard Branson, is part of the billionaire-backed space race with Jeff Bezos’ Blue Origin and Elon Musk’s SpaceX, and is popular among social media users because it promotes space exploration.
The recent meme stock rally has driven Virgin Galactic shares up, but the shares are still down over 65% from last year and 44% so far this year.
Similarly, Blackberry — maker of the darling smartphone of the 2000s — saw a jump of 14% Tuesday morning. The stock is still down 30% over the last year.
The Blackberry phone was once a statement piece for business types, but Apple $AAPL’s iPhone soon wrestled market share away from the Canadian company. Today, Blackberry provides endpoint security software and Internet of Things (IoT) management solutions to customers like automakers.
Headphone manufacturer Koss was one of the major meme stocks of 2021, alongside GameStop and AMC Entertainment. On Tuesday morning, the stock rallied 35%.
SunPower, one of the most short-sold stocks on Wall Street, saw its shares jump 19.6% on Monday. SunPower stock was up 62% Tuesday morning.
As meme stocks return, many wonder how far the rally will go and whether we’ll see a repeat of what happened in 2021.
In an email interview, Dan Egan, the Head of Behavioral Finance at investment advisor Betterment, said the current meme stock rally is a more time-compressed phenomenon. In 2021, interest rates were low, and people were stuck at home during the pandemic with extra cash from stimulus checks. None of those things are happening in 2024, he said.
“There might be a large body of meme stockholders who bought during the last rally looking to get out,” he wrote.
“People with a losing stock will be motivated to sell as soon as they’re back to even, which will put some downward pressure on the price as it hits higher price points.”
Egan believes that while there is still a core group of people who are interested in this, it will be less widespread and, therefore, will be over quickly. He said these types of volatile price swings do not benefit companies and investors.
“It makes shareholders more transient and short-termist, harder to negotiate with,” he added. “It can tank acquisition plans and talks and make it very hard to retain senior people.”
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