Despite a good start to Monday trading for both the broader market and recently booming meme stocks, shares of GameStop took a steep turn for the worst before the close after new data revealed the number of investors shorting the stock has fallen.
After posting their worst weekly performances since late October last week, the Dow Jones industrial average ended the day up 229 points, or 0.8%, while the S&P 500 and tech-heavy Nasdaq jumped about 1.6% and 2.6%, respectively.
Meanwhile, shares of leading meme stock GameStop, which surged 400% last week, plunged 31% after market data firm S3 Partners said shorted shares of the stock fell by about 57% since Friday, with Managing Partner Ihor Dusaniwsky noting that short-sellers “have found opportunities and price exit points to trim their positions.” Other meme stocks also lost momentum: AMC Entertainment ticked up just 0.3% after skyrocketing about 275% last week as online brokerage Robinhood relaxed its trading restrictions on Reddit-fueled stocks. The softer gains come as Reddit traders turned attention to silver on Monday, pushing the commodity’s price up 11% to an eight-year high in an attempt to once again squeeze money out of Wall Street firms, but many on the discussion board warned the effort would only divert attention away from meme stocks. Heading up gains in the S&P, shares of International Flavors & Fragrances surged 14% after the firm announced it is set to complete its previously announced merger with DuPont’s nutrition and biosciences business, creating a combined company with annual revenues of more than $11 billion Global stocks also largely pushed higher after a lukewarm end to last week, with Japan’s Nikkei 225 closing up 1.6% Monday, while the United Kingdom’s FTSE 100 climbed 0.9% and Germany’s DAX index 1.4%.