Members of the private investor community on Reddit, who were buying up shares of companies undervalued in their opinion, began to lose interest in trading on the stock exchange and cooled their ardor, Bloomberg reports.
In particular, the price of silver, which buyers have accelerated to a high in eight years in a few days, have pulled back. During trading on Tuesday, February 2, the precious metal lost 5.5 percent, the price fell to $ 27.81 per ounce. GameStop’s stocks fell 34 percent on Monday, February 1, to $ 213 a share, then slowed to 21 percent ($ 253.5 a share).
Speaking about the pullback in silver prices, a senior analyst at MineLife Pty said that this is not surprising. Any growth based on social media activity will not be long-term, he said. “There is a big difference between trying to manipulate stock trading versus the underlying commodity,” he explained.
At the end of January 2021, on a wave of speculative buying, shares of the American video game retailer GameStop, the AMC movie theater chain, as well as smartphone manufacturers Nokia, BlackBerry and other companies that were called undervalued on Reddit rose sharply. In particular, since the beginning of the year, GameStop shares have jumped 400 percent, and its capitalization has reached seven billion dollars. Prior to that, the securities of the trading network had been falling for six years.
Millions of small individual investors have united in the WallStreetBets group and began to actively buy up shares. As a result, in a couple of weeks the company’s shares rose more than tenfold, and a number of funds were forced to close their short positions (“shorts”) with billions of dollars in losses.