Gamestops? Shares plunge more than 50 per cent as Reddit rally retreats
Reddit day traders’ hold on the market seemed to be running out of steam on Tuesday as the price of silver stalled and Gamestop shares plunged more than 50 per cent on the open.
Gamestop has dominated the headlines in the past week after r/wallstreetbets took the fight to Wall Street’s hedge funds. The bricks-and-mortar retailer became the epicentre of a short squeeze rally which saw its share price saw 300 per cent.
Redditors had pinned their hopes on Gamestop reaching up to $500 but shares are now down 52 per cent at $107.78. Six months ago the retailer was trading at just over $4 dollars per share.
Silver’s rally was also stopped in its tracks today as it dropped back below $27 per ounce. The price of silver hit its highest level in eight years earlier this week, climbing above $30 an ounce as Reddit investors coordinated themselves to take on the precious metal.
It closed last week up more than five per cent and gained as much as 10 per cent in a matter of hours earlier this week.
The soaring price of silver was in large part due to r/wallstreetbets but Activtrades chief analyst Carlo Alberto De Casa suggests industrial firms may have inadvertently caused the price spike.
“Almost 50 per cent of the total demand for silver comes from the industrial sector. Some of the companies that use it, worried about the sudden jump in price, might have decided to buy, to avoid having to pay even higher prices in future.”
Wall Street opened strong with the benchmark S&P 500 and the tech-heavy Nasdaq trading up 1.7 per cent
Dow Jones and tech-heavy Nasdaq all trading up between 1.2 and 1.3 per cent ahead of Amazon and Google owner Alphabet’s results.
The Dow Jones is up nearly 1.9 per cent at 30,774 points.