2024’s meme stock resurrection adds more than $500 million to fortunes of these two billionaires

Investing

The return to social media of the pandemic era meme stock captain didn’t just boost shares of fabled meme stock GameStop, it sent several other meme stocks up big, helping make the fortunes of billionaires linked to the entities even richer.
GameStop shares almost doubled Monday. GETTY IMAGES
Key facts
  • Shares of video game retail franchise GameStop shares rose 74%, notching their biggest one-day gain since Feb. 2021 and closing at their highest level since Aug. 2022, while shares of movie theater chain AMC, arguably the second most notorious meme stock, rallied 78%, registering their best day since June 2021 and hitting their highest price since January.
  • Other stocks more loosely associated with the meme stock frenzy also gained considerably Monday, as shares of social media firms Reddit and Trump Media rose as much as 9% apiece to respective two-month intraday highs, while dogecoin, the shiba inu-mascotted cryptocurrency token that represents perhaps the most famous example of meme frenzy in crypto, rose 7% in the 24-hour period ending at Monday’s market close.
  • The massive gains for the group beloved by some retail investors came during a largely uneventful trading session for the broader market, with the S&P 500 falling less than 0.1%, and a lack of particularly catalytic news for the companies, such as earnings reports.
  • Instead, the impetus for the meme stock surge was the Sunday evening social media reappearance of “Roaring Kitty,” the pseudonym of 37-year-old Keith Gil, who became the face of the 2020-21 short squeeze in which day traders, largely congregating on Reddit’s WallStreetBets forum, pushed against institutional investors who bet against the success of nostalgic but poorly performing companies like GameStop and AMC.
  • GameStop’s rally pushed short sellers’ paper losses to over $1 billion, according to S3 Partners data, evoking memories of the multibillion-dollar losses in 2021 suffered by finance titans like Gabe Plotkin, whose $3.5 billion hedge fund was forced to shutter after the failed GameStop short.
Surprising fact

Though some retail investors, especially those highly leveraged with options trades, got much richer following Monday’s gains, it was still billionaires who gained the most. 

Ryan Cohen, GameStop’s CEO, chairman and largest individual shareholder with his 12% stake, grew about $480 million richer, expanding his fortune to $4.2 billion.

Donald J. Trump, the former U.S. president who owns 85% of his namesake social media company, got $100 million richer, swelling his net worth to almost $8 billion.

Key background

What constitutes a meme stock depends on the eye of the beholder, but it can reasonably be defined as a publicly traded equity whose value often swings wildly based on little to no information materially impacting the company’s business.

Meme stocks also typically have an ownership base atypical for other stocks, with retail investors and insiders often owning a far higher percentage of shares than mainstream equities.

For example, institutional investors like Vanguard and Fidelity own just 1% of Trump Media and 24% of GameStop, compared to 33% institutional ownership of Microsoft.

Meme stocks tend to be highly volatile, evidenced by one-time meme stocks Bed Bath & Beyond and WeWork’s bankruptcies.

This article was first published on forbes.com and all figures are in USD.

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