Bloomberg. The Wall Street Journal. Financial Times. CNBC. Business Insider. USA Today.
All these outlets and more ran articles this week claiming that retail investors who had pumped up the price of $GME the week prior were eyeing silver stocks next. In particular, these articles pointed towards iShares Silver Trust ($SLV) as the next stock that WallStreetBets was about to target.
Except that didn’t quite happen. There certainly was a spike: prices reached an 8-year high Monday, and $SLV jumped 13% up to $26.76 per share. But that 13% increase pales in comparison to the rallys that other meme stocks saw — GameStop, AMC and even Nokia saw increases of 511%, 359%, and 51% respectively from January 25 to their peaks during last week’s craze.
While the media was busy declaring an oncoming silver squeeze, posts on WallStreetBets were painting a very different picture. The subreddit looked in the midst of chaos; the sudden restrictions on trading by apps like Robinhood last week had sent $GME into a death spiral (at market close Tuesday it was at $90), and users were trying to convince others to hold their positions.
But also in the mix were posts about $SLV being the next move. Some of the earlier posts pushing $SLV at the end of last week were received relatively well. One post even theorized that Robinhood had made a deal with Goldman and JP Morgan to restrict trading on $SLV so that their positions wouldn’t be affected and they could keep the cost of silver low. Though these posts weren’t outright rejected, users in comments sections advised that others stick to $GME and that there would be plenty of time to pump up silver in the future.
“Stonks first. Maybe metal. Then the world,” wrote user urmomsgynokologist69.
Just one day later, posts started appearing declaring a bot invasion that was pushing stocks to distract from $GME – including silver. Quickly this devolved into users claiming that firms like Citadel and Melvin were infiltrating the subreddit to push their agendas.
One post titled “JPM & CITADEL AND HOW SLV IS CONNECTED. MAJOR SCHEME THAT WAS PLANNED AND HERE IS HOW YOU ARE GETTING PLAYED,” which received over 1,399 upvotes and multiple Reddit gold badges, alleged that JP Morgan had orchestrated the supposed silver squeeze. The theory was that JP Morgan was buying options on and pushing silver to take advantage of WallStreetBets so that it could make enough money in case Robinhood took on irreparable losses and Citadel wasn’t able to cover them.
Though the theory was later disputed, it was enough to set off a frenzy. “Is $SLV a trap?” one user asked. “Part of me thinks everyone dogging on silver over the weekend are bots,” wrote another. “I personally don’t want you fuckers to meme that shit and blow up the market anyway. I want it to rise long and slow, sustainably. Not moonshot and crash.” Some users who had been investing in silver for months also got caught up in the crossfire. Today and yesterday, the subreddit has been full of posts ridiculing the media for declaring an oncoming silver squeeze at the hands of the subreddit.
So why did all these outlets suddenly declare that a silver squeeze was WallStreetBet’s next move? It’s not clear. Even though it didn’t ultimately come to pass, $SLV and Silver Squeeze were trending on Twitter early in the week, which may have prompted outlets to cover what they saw might potentially become the next $GME. Once one big enough outlet covers it, others may scramble to do the same — a sort of New York Times Effect of cascading articles written without checking to see what was actually going on under the hood.
The result is that WallStreetBets has declared another enemy across their line in the sand. In the eyes of many there, the media was complicit with Citadel and JP Morgan’s scheme and can’t be trusted. “The media, Wall Street, normies and every other non-WSB autist are trying to push you to buy silver,” one viral post declared. “The squeeze is fake, it will put you on the sidelines from this glorious war we are in.” The circle of trust continues to shrink, especially as noteworthy figures turn their backs on the community, and WallStreetBets will continue to rely on itself for advice.
