Introduction

Could a single tweet reignite the meme stock frenzy that took over Wall Street three years ago? GameStop and AMC's shares are again surging, with trading on these stocks being halted multiple times just this week. Such suspensions are a standard mechanism to protect against excessive volatility, but some retail traders are complaining about their service providers, accusing them of blocking trades. This frustration is unsurprising, given that major players like Robinhood implemented similar measures in 2021.

Roaring Kitty’s Influence

Keith Gill, known online as "Roaring Kitty" and considered the catalyst of the pandemic-era stock craze, reappeared on Twitter after three years. On Sunday, he posted an image depicting a man sitting in a chair. While this might seem insignificant at first glance, gamers recognize it as a meme indicating that "things are getting serious." The result? GameStop shares (NYSE: GME) opened with a significant gap on Monday, ending the day up 74%. By Tuesday, they surged another 60%, peaking at a 114% gain. Similarly, AMC shares (NYSE: AMC) rose 78% at the start of the week and added another 32% on Tuesday. Throughout May, AMC shares increased by 133%, while GME shares soared by 340%, surpassing Bitcoin's annual gains.

“There are a couple of differences between 2021 and 2024, not least that the stock price is far higher now than it was before the meme stock craze in 2021,” said Kathleen Brooks, Research Director at XTB. “Back then it was trading around $5, today it is trading at $30, so it may not be as much of a bargain as it once was.”

Meme Stock Surge

With such high volatility comes heightened investor interest and increased intervention by exchanges. According to Evan Gold, the founder of Stock Market News, the NYSE halted trading on these two meme stocks 38 times during Tuesday's session. As a result, retail trading platforms also temporarily halted trading on AMC and GameStop. In one tweet, Evan noted, “Trading in GameStop $GME and $AMC was halted a combined 38 times today.”

eToro issued a statement to reassure users that these halts are a normal "safety mechanism." „Please note that these halts are part of standard market dynamics and are not initiated by eToro. We continue to reflect the pricing we receive, however, you may experience interruptions in trading due to these exchange-imposed suspensions,” eToro explained.

The renewed attention on meme stocks has left users wary, especially given the 2021 events when platforms like Robinhood blocked access, citing the need to protect users from excessively volatile markets. Back then, traditional brokers like TD Ameritrade, IG Group, and Charles Schwab also restricted trading on these stocks. Now, the current trading halts are due to the exchanges' automatic defensive mechanisms.

The phenomenon of meme stocks, driven by retail investors organizing on platforms like Reddit, continues to defy traditional financial analysis. This surge has once again pointed out the power of collective action in the stock market, reminiscent of the 2021 revolution. Indeed, whether this new wave will lead to long-term impact or fizzle out as a spectacular but brief resurgence remains to be seen. For now, let's just say things are getting serious—or at least more entertaining.

Trading halts and investor reactions

Could a single tweet reignite the meme stock frenzy that took Wall Street by storm three years ago? That's the question on everyone's mind as GameStop and AMC shares experience an unprecedented level of volatility. This week alone, trading on these two meme stocks was halted a staggering 38 times. These suspensions aren't just random bursts of chaos; they're calculated moves by exchanges to protect against excessive market fluctuations. Yet, even with these precautions, retail traders are feeling a bit grumpy, pointing fingers at their service providers for what they perceive as blocks to their trades. Sound familiar? Indeed, echoes of Robinhood's controversial trading halts in 2021 are still fresh in many minds.

Adding fuel to the fire, Keith Gill, known online as “Roaring Kitty” and the catalyst behind the original meme stock craze, made a cryptic return to Twitter after a three-year hiatus. On Sunday, he posted an image that gamers instantly recognized as a meme for "things are getting serious." And serious they did get. GameStop (NYSE: GME) shares skyrocketed, opening with a substantial gap on Monday and closing 74% higher. Tuesday didn't disappoint either, with shares peaking at a 114% gain. AMC (NYSE: AMC) shares mirrored this frenzy, starting the week with a 78% jump and surging another 32% by Tuesday. Put simply, it's meme stock madness redux.

eToro's statement

With such dramatic volatility, it's no wonder exchanges are stepping up their game. Evan Gold, the founder of Stock Market News, noted that the NYSE halted trading on these meme stocks 38 times just on Tuesday. Naturally, this ripple effect impacted retail trading platforms like eToro, which temporarily halted trading on GameStop and AMC. In an attempt to calm frayed nerves, eToro issued a reassuring statement explaining that these halts are part of standard market safety mechanisms. "Please note that these halts are part of standard market dynamics and are not initiated by eToro. We continue to reflect the pricing we receive; however, you may experience interruptions in trading due to these exchange-imposed suspensions," the statement read. Talk about trying to soothe a community of antsy day traders!

But are other platforms following suit? Information is a bit thin on the ground. There's a solitary report from an X user mentioning a similar issue with Trading212. Given the history of platform restrictions during the 2021 meme stock saga, this isn't entirely shocking. Back then, Robinhood, along with traditional brokers like TD Ameritrade, IG Group, and Charles Schwab, restricted trading on these highly volatile stocks citing user protection needs. Fast forward to today, and these new trading halts are being triggered automatically by the exchanges' defensive mechanisms in response to extreme market volatility.

Historical context of meme stocks

For the uninitiated, the term "meme stocks" might sound like a joke, but it's a phenomenon that turned the financial world on its head in early 2021. It all started with a group of retail investors, mainly congregating on Reddit, who targeted companies like GameStop and AMC. GameStop, a struggling video game retailer, and AMC, a pandemic-ravaged movie theater chain, became the epicenter of a financial movement. These investors collectively decided to buy shares of these companies, driving their stock prices through the roof. And it wasn't just about making a quick buck; it was a modern financial rebellion aimed at sticking it to the man—specifically, the hedge funds that had heavily shorted these stocks, betting their prices would tumble.

The volatility surged as GameStop and AMC stocks skyrocketed, drawing widespread media attention and triggering market chaos. Prices soared to astronomically high levels, far beyond what traditional financial metrics would justify. Hedge funds, caught off guard, were forced to buy back shares at much higher prices to cover their short positions, incurring massive losses. For the retail investors behind this movement, it wasn't just about financial gains but about challenging Wall Street norms, proving that the little guy could wield significant power in the stock market.

So, is the meme stock mania making a comeback? It's hard to say definitively, but all signs point to an exciting and volatile period ahead. Whether fueled by social media or savvy investing, meme stocks remain a fascinating aspect of the modern financial landscape.

Introduction

Remember that wild, wild West atmosphere of 2021 with retail traders going on mission “Bust the Hedge Funds” via meme stocks? Well, buckle up, because the madness seems to be back, and GameStop and AMC are again the star players. Recently, GameStop and AMC shares were halted a whopping 38 times! Let's uncover what’s brewing in the land of meme stocks and why everyone from Wall Street hawks to your grandma is talking about it.

The return of "Roaring Kitty"

Keith Gill, more famously known as "Roaring Kitty," hopped back on Twitter after a three-year hiatus. For those living under a rock during the 2021 meme stock saga, Gill was one of the prime movers who sparked the GameStop frenzy. This time, he dropped a meme of a man sitting in a chair—a subtle nod to serious business. And serious it got! GameStop’s stock shot up 74% on Monday and kept climbing. AMC wasn’t left behind either, with its stocks rising 78% by the end of Monday. Is this 2021 all over again or just a brief trip down memory lane?

Trading halts and investor confusion

No high-stakes stock drama is complete without a few trading halts, right? The New York Stock Exchange suspended trading on GameStop and AMC stocks 38 times in a single day to combat the extreme volatility. Imagine the chaos! The noise grew louder with retail platforms like eToro issuing statements to assure users the halts were standard procedure and not the result of their own doing. Cue the flashbacks to 2021's blockade dramas by platforms like Robinhood. Users started scratching heads and keyboards, while platforms did their best to navigate these stormy waters without too many tempests.

Why meme stocks, why now?

The allure of meme stocks like GameStop and AMC goes beyond quirky internet culture. Back in the dark days of the pandemic, a motley crew of retail investors on platforms like Reddit decided to take Wall Street by storm. They targeted stocks heavily shorted by leviathan hedge funds, flipping the script and causing massive financial waves. GameStop, a beleaguered video game retailer, and AMC, a cinema chain reeling from lockdowns, became the symbols of this unique financial revolution. These stocks skyrocketed in value, forcing shorts to cover their positions at outrageously high prices. Fast forward to today, the question looms: Will history repeat, or is this just a reminder of the wild times gone by?

Conclusion

Even without a crystal ball, it’s clear that the meme stock phenomenon isn’t fading quietly into the financial night. Keith "Roaring Kitty" Gill's simple meme stirred the pot enough to drive significant market movements. The trading halts are a double-edged sword—protecting the market from volatility while rattling traders’ nerves. Whether this is a full-blown sequel or just a nostalgic cameo remains to be seen. One thing’s for sure—pop some popcorn, because the show’s just getting started.