May 14 (Reuters) - GameStop ( GME ) and AMC Entertainment ( AMC ) have

again captured retail investors' attention, reminiscent of "the

meme stock frenzy" that gripped Wall Street three years ago,

following social media posts from the leading figure behind that

rally "Roaring Kitty".

Here is what you need to know about the recent surge in meme

stocks:

ROARING KITTY AND HIS SKETCH

Keith Gill, popularly known among traders as "Roaring Kitty",

shared a series of cryptic posts on social media platform X on

Sunday following a three-year gap. One of them included a sketch

of a man leaning forward in a chair, a popular meme among gamers

that indicates things are getting serious.

With colorful YouTube streams and Reddit ( RDDT ) posts, Gill made

the bull case for GameStop ( GME ) in 2021, helping attract a flood of

retail cash into the company.

In Gill's 2021 testimony to Congress, he denied the notion that

he used social media to profit by promoting GameStop ( GME ) to

unwitting investors.

GAMESTOP LEADS, AGAIN

Videogame retailer GameStop ( GME ) has rallied more than

139% since Friday close through Tuesday afternoon, set to add

more than $9 billion to its market value. Theatre chain AMC

Entertainment ( AMC ) has climbed more than 130% following the

two-day rally. The highly shorted shares were set for their best

2-day gains since January 2021. Still, both remain well below

the 2021 highs.

The pair was also the two most traded stocks by retail

investors on Monday, as per J.P. Morgan.

Retail traders also pumped up other highly shorted stocks

including solar firm SunPower Corp ( SPWR ), headphones maker

Koss Corp ( KOSS ) and storage container maker Tupperware Brands ( TUP )

, sending them soaring between 24% and 83%.

Retail market order as a percentage of total market volume

increased to 17.5% on May 13 from 14.1% on May 1, J.P.Morgan

data showed.

WHAT ARE MEME STOCKS?

Meme stocks refer to certain company shares that have been

boosted by retail investors using trading platforms and social

media investment advice.

It burst into the open during 2021 when the COVID-19

lockdowns boosted savings, policy stimulus put cash into

people's pockets and extremely low interest rates pushed

investors to the stock market.

A proliferation of zero-fee trading apps also encouraged

anyone with a smartphone to dabble in stocks.

Thousands of Reddit ( RDDT ) users on low-cost trading

platforms such as Robinhood banded together to drive up

the prices of "meme" stocks, squeezing hedge funds that had

taken short positions, or bets against those shares.

HOW IS IT DIFFERENT THIS TIME?

U.S. interest rates are at multi-decade highs following the

Federal Reserve's aggressive efforts to tame inflation and the

S&P 500's gains are concentrated in the shares of a

handful of megacap companies.

Many fund managers are also waiting for more commentary from

"Roaring Kitty".

Roundhill Investments last year announced the closure of its

exchange-traded fund tracking the performance of meme stocks

nearly two years after its launch, putting a nail in the coffin

of the popular pandemic-era trade.

(Reporting by Sruthi Shankar and Medha Singh in Bengaluru;

Editing by Sriraj Kalluvila)