Meme stock speculation propels Koss shares 25% higher on Friday

[July 06, 2024]  By Suzanne McGee

(Reuters) - Shares of headphone maker Koss Corp. soared for the second session in a row on Friday, closing at $13.35 a share, after trading as high as $18.50 early in the day, as social media posts speculated that a post by meme stock influencer Keith Gill indicated his interest in the company.

Some followers of Gill, known to his online followers as 'Roaring Kitty', on social media pointed to cryptic images he posted in May of a microphone posted against the backdrop of the U.S. flag. The image was shown as an emoji that scrolled across the end of a video.

That led to speculation on Reddit, such as Otherwise-Category42's post on the sub-Reddit devoted to GameStop that has been tracking Gill's return, that 'Roaring Kitty' would become a buyer of Koss shares on or around July 4, the U.S. Independence Day holiday. The poster also documented similarities between Koss and GameStop. Others on Reddit, however, were skeptical as the U.S. flag emoticon featured a microphone and not headphones.

Koss' gain on Friday follows a 143.8% jump during Wednesday's abbreviated trading session and brings its gains for the week to nearly 230%. In premarket trading on Friday, the stock briefly traded as much as 74% higher.

"There are absolutely no fundamental reasons why this company might be worth four times what it was at the beginning of the week," said Steve Sosnick, market strategist at Interactive Brokers.
 

Keith Gill, an individual online investor in GameStop, testifies during an entirely virtual hearing of the U.S. House of Representatives Committee on Financial Services entitled “Game Stopped? February 18, 2021. House Committee on Financial Services/Handout via Reuters/File Photo

Nearly half of Koss's 9.25 million shares are held by insiders and such a small public float means even small upticks in buying can result in exaggerated moves, Sosnick and other traders noted. By early afternoon Friday, trading volume had topped 47 million shares. Its average daily trading volume over the last 60 days is less than 2 million, traders noted.

Koss could not be reached for comment.

Gill, who did not return calls or e-mails seeking comment, has not made any public comments about Koss. In mid-June, he disclosed a position of 9 million shares in GameStop Corp. and most recently, revealed in a filing with U.S. regulators that he acquired a 6.6% stake in online pet food retailer Chewy Inc..

Prior to making the Chewy investment, Gill posted a series of images about a cartoon dog on X that followers believe foreshadowed that disclosure. The earlier video had also featured an emoji of a similar cartoon dog. That sent "Roaring Kitty" fans in search of any hidden meanings in other stocks.

(Reporting by Suzanne McGee; editing by Megan Davies and Josie Kao)

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