GameStop lovers launch attack against silver on Reddit
WallStreetBets investors claim buying silver puts money into pockets of hedge funds
NEW YORK -- Retail investors on the popular online forum WallStreetBets expressed concerns on Monday that bets on silver were undercutting their focus on GameStop Corp and other popular stocks.
Posts that argued against buying silver at the expense of GameStop swarmed across the 7.9 million-member discussion board as shares of GameStop fell 30.8% to close at $225.00 on Monday. Spot silver, meanwhile, jumped more than 11% before paring some gains, its largest one-day rise since 2008.
INVESTMENT EXEC PREDICTS GAMESTOP WILL TOP $1,000 PER SHARE
“By buying silver ... you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME,” wrote a user with the handle RizzutosNOTAWORD who urged investors to continue to buy GameStop. “It will put you on the sidelines from this righteous and glorious war we are in.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GME | GAMESTOP CORP. | 10.42 | +0.11 | +1.07% |
The posts discouraging investors from buying silver came after a number of posts over the weekend that touted buying the metal because it was undervalued and shorted by large institutions.
"Its value is seriously being artificially depressed by the big banks," a user with the handle mrbulldops17 wrote late last week.
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Retail investors had pushed GameStop up more than 1,650% during the month of January as a form of protest against a handful of hedge funds which were betting that shares of the video game retailer would fall.
The short squeeze in Reddit-favorite “stonks” - an intentional misspelling of “stocks” - has upended Wall Street over the last month, forcing hedge funds such as Melvin Capital to post declines of more than 50% while short-sellers such as Andrew Left’s Citron Research have shifted their approaches to focusing only on long positions.
The last two weeks have been “a wakeup call and retail traders are likely to continue to be a force to be reckoned with, which will likely permanently affect the business models of institutional investors,” according to a note from Barclays.
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Yet the muted trading in silver is one sign that individual investor buying may not sway global assets as they have small-cap stocks with low trading volumes, said Brian Jacobsen, senior investment strategist for the Multi-Asset Solutions team at Wells Fargo Asset Management.