No matter what happens next to shares of GameStop, AMC or the price of silver, average Joes and Janes are now a force to be reckoned with on Wall Street.
The short squeeze last week that propelled GameStop (GME) and other momentum investments popular with the Reddit crowd now appears to be on hold. GameStop plunged more than 50% Tuesday while AMC (AMC), silver prices and silver mining companies also fell sharply. That’s partly due to trading restrictions from Robinhood and other brokers on how many shares of volatile stocks like GameStop, AMC (AMC), Express (EXPR) and Nokia (NOK) that retail investors can purchase in a single stock at a time. But heavily shorted stocks could wind up rallying again. In fact, on Tuesday Mark Cuban urged members of Reddit’s WallStreetBets community to stay the course with stocks like GameStop. „I have no doubt that there are funds and big players that have shorted this stock again thinking they are smarter than everyone on WSB,“ the Dallas Mavericks owner and Shark Tank investor said on a Reddit AMA. „I know you are going to hate to hear this, but the lower it goes, the more powerful WSB can be stepping up to buy the stock again.“ After all, retail investors have proven that they can push hedge funds around — and they are likely to start focusing on other stocks and commodities that they think can (and should) move higher. „Social investing is not going away,“ said Kerim Derhalli, CEO and founder of Invstr, a trading app. „This is a powerful commercial trend and we are just at the beginning of it. People have more information and power.“ Younger investors have taken control of the market Derhalli pointed out that as younger investors increasingly start buying and selling stocks, the market will need to adapt. He said the rise of other popular stocks, such as Tesla (TSLA) and Beyond Mea (BYND)t are due partly to Millennials and Gen Zers investing in brands that they know and like. „Younger retail investors are in touch with changes taking place. They understand consumer trends because they are the ones making and creating them,“ Derhalli said.
