The Reddit community of investors who fueled the GameStop rally has shifted its focus to precious metal silver taking its price 7% higher to $29 per ounce.
On Monday, February 1, shares of the brick-and-mortar videogame company GameStop Corp (NYSE: GME) corrected 30% in sharp selling. The frenzy within the Reddit community r/WallStreetBets that fueled GameStop stock last week seems to weaken. In fact, it turns out that the Reddit community has now shifted its focus to Silver.
Talking about GameStop first, GME stock surged 18% in pre-market trading going up to $384. However, it soon faced profit-booking within market hours. On Monday closing, GME stock was trading 31.5% down at $225 per share. Also, the GME volume was more than 34 million by the end of the trading session. The GME stock ended the month of January with a solid 1600% returns.
Amid extreme volatility in GameStop stock, shorter have burnt their fingers big time. Over the last week, the number of GameStop stock shorted dropped by 35 million. As of now, only 27.1 million short positions remain in the market. Analytics firm S3 that specializes in analyzing “short-sell” data noted that there’s a 53% drop over the last year. Ihor Dusaniwsky — the head of predictive analytics told MarketWatch:
“Both fundamental and momentum short sellers have found opportunities and price exit points to trim their positions in the face of these losses as the GME short squeeze is in full force”.
However, GameStop’s last week companion AMC Entertainment Holdings Inc (NYSE: AMC) shot up nearly 30% on Monday during the early market hours. However, the stock ended its trading just 0.3% up at $13.30. Analysts have, however, downgraded the stock cutting its target price to $1.
Reddit Army Shift Focus from GameStop to Silver
After pumping GME and AMC stock last week, the Reddit army has now moved its focus to silver. Stocks of precious metal producers like First Majestic Silver (TSE: FR) jumped 23% on Monday. The Reddit fueled buying into Silver pushed the price of the commodity 7% high to $29.70 an ounce. Interestingly, this is the first time since March 2013 that the Silver price has seen these levels.
On the other hand, Robinhood has lifted the limits on the purchase of GameStop (GME) stock on Monday. This easing of stock comes on Monday just before announcing a new capital fundraise of $2.4 billion. Robinhood CEO Vlad Tenev will be testifying before Congress after massive investor backlash. Interestingly, Tenev has accused Elon Musk of “getting into conspiracy theories”.
After the GameStop saga, Musk had indirectly supported the Reddit community. Besides, during a live stream interview, the world’s richest man also accused established funds and the US financial regulators to rein-in the purchases of GameStop shares on Robinhood.
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