GameStop halted trading twice, then resumed with an 80% surge. Is the leader of US retail investors, "带头大哥", making a comeback?

Will the return of the "leading big brother" trigger a resurgence of meme stocks frenzy?

At the opening on Monday, GameStation triggered a circuit breaker, with a temporary trading halt as the stock surged by 54%, and after resuming trading, the stock price continued to rise, with an increase of over 80%.

In pre-market trading in the US, without any major news, GameStop soared by over 40%, reminiscent of the intense tug-of-war between retail investors and short-selling institutions over GameStop in the "retail investors vs. short sellers" battle in 2021.

The catalyst for this surge in GameStop this time is the speculation surrounding the return of Keith Gill, codenamed "Roaring Kitty," who posted on his social media site X, sparking speculation about his return.

The post shows a man leaning forward, holding something that looks like a game controller. Some traders believe this means Gill is about to take action again. Gill's account has been dormant for a long time, and in 2021, he gained fame by calling on short-term traders to squeeze GameStop on Reddit.

X users are ecstatic about his return, with this post garnering over 9 million views within hours of its release, and some users stating that GameStop has never been sold.

Despite GameStop's stock price still far from its 2021 peak, fueled by the latest wave of retail buying frenzy, the stock has surged by over 70% in just one month.

GameStop still faces significant short interest pressure, with the number of shares shorted doubling from the end of 2021 to 25 million shares, equivalent to 24% of the float, well above the average level. This situation is similar to the surge in 2021, when GameStop skyrocketed by over 160% in January 2021, bringing meme stocks frenzy into the public eye.

Under the short squeeze from retail investors, the hedge funds shorting GameStop have suffered heavy losses. Currently, the short pressure remains high, which could still lead to a continuous surge in GameStop's stock price.

However, the skyrocketing trend could come to a sudden halt at any time. GameStop continues to face severe fundamental challenges, and this surge lacks fundamental catalysts. The enthusiasm of retail investors is often difficult to sustain, as they can quickly embrace a stock but also swiftly abandon it.

Since the collapse in 2022, meme stocks and other unprofitable companies have been in a "dormant" state, mainly due to the tightening financial conditions caused by the Fed's Powell hiking cycle. Will the upcoming rate cut cycle kickstart some form of recovery?

Currently, meme stocks seem to be making a comeback. Apart from GameStop, the stock price of the cinema chain AMC, favored by retail investors, surged by 17% on Monday.