WRAPUP 2-GameStop slides, silver spree stalls as retail traders run out of road

(Adds trader comments, details on U.S. pre-market movement)

* GME down 30% in Frankfurt, down 23% in U.S. pre-market

* Silver falls 8% from Monday's eight-year high

* Robinhood raises $3.4 bln from investors in a week

By Tom Westbrook and Thyagaraju Adinarayan

Feb 2 (Reuters) - GameStop shares sank on Tuesday and a
silver buying spree led by small investors subsided as a
Reddit-driven trading frenzy that has shocked global financial
markets over the past week started to show signs of fizzling
out.

The videogame chain's U.S.-listed shares, which have
see-sawed in a dramatic week that has seen billions of dollars
gained and lost by financial firms, were down 23% in early
pre-market trading after closing down 31% on Monday.

Spot silver prices, an alternative focus in the
battle between a pack of small traders and Wall Street hedge
funds since late last week, fell more than 4% to $27.66 an ounce
after hitting an eight-year high a day earlier.

Analysts said the silver pullback may show the limits of
small investors' impact in a large market, while posts on the
popular Reddit forum WallStreetBets expressed concern that
silver buying could cost traders their grip on some stocks.

"The stocks side of things has faded because they all had a
look at silver yesterday, but my feeling is they'll be back,
depending on whether retail trading platforms will allow you to
buy more than one share," said Keith Temperton, an equity sales
trader at Forte Securities.

Another Reddit favorite, movie theater operator AMC,
also slumped 21% although it remains 500% higher than the start
of the year, before the organized band of small buyers piled in
and forced a "squeeze" that required big funds to close short
positions by buying shares at very high prices.

Online broker Robinhood, on whose platform much of the
buying and selling has taken place, confirmed on Monday it had
raised another $2.4 billion from shareholders following a $1
billion boost last week as it strives to meet demands for
additional collateral to cover trades.

The broker has also held talks with banks about raising
another $1 billion in debt, people familiar with the matter told
Reuters.

Analysts at financial institutions continued to predict the
action was likely to fade, it was just a question of how soon.

"With volumes in all the hot stocks collapsing, silver
attack met by margin, Robinhood having to seek fresh collateral
at a rampant speed, the signals that the retail mania could
unravel rapidly are aligning," said Mark Taylor, a London-based
equity sales trader with financial group Mirabaud.

SHOWDOWN

The surge in day-trading mania has boosted the price of
assets ranging from cryptocurrencies to new stock market
listings.

In London a sign of still-strong demand came from online
greeting-card retailer Moonpig, which leapt 25% in its
debut on Tuesday.

With financial regulators eyeing the action, Robinhood
continued to roll back trading curbs on Monday, raising trading
limits on GameStop to 20 shares from four.

Weak prices in pre-market trade may serve as a guide to
where the phenomenon is headed next, although broader markets
appeared to be moving on from jitters the frenzied buying had
triggered and S&P 500 futures rose 0.9% on stimulus
hopes.

The number of shorted GameStop shares has fallen by more
than half in a week, analytics firm S3 Partners said on Monday,
although the videogame retailer remained the sixth-biggest short
by value.

"Short-squeeze mania has calmed a bit for this week," said
Chris Brankin, chief executive of broker TD Ameritrade in
Singapore.

QUICKSILVER

One big drag on prices was an overnight margin hike on
silver by the Chicago Mercantile Exchange, which makes
speculative trade using derivatives more expensive.

The unit price of Australia's ETF Securities' Physical
Silver fund fell 1% in Sydney after drawing a record
A$76 million ($58 million) in inflows on Monday. Small silver
miners, which had leapt, also retraced some of their gains.

"It is slowing down a bit," said Gregor Gregersen, founder
of Silver Bullion, a dealer in Singapore, after a wild 24 hours
where he said sales exceeded average monthly levels from 2018
and orders above S$35,000 ($26,300) arrived every three minutes.

Reddit moderators had on Tuesday removed one of the most
popular posts suggesting buying silver and many WallStreetBets
posts focused on riding out the volatility.

"WHO IS HOLDING GME WITH ME?" read one top post. "I'M
HOLDING EVEN IF MY PORTFOLIO GOES DOWN TO ZERO," read another.

($1 = 0.8280 euros)

($1 = 1.3108 Australian dollars)

(Reporting by Thyagaraju Adinarayan in London and Sumita Layek,
Swati Verma and Shariq Khan in Bangalore; Writing by Tom
Westbrook and Sagarika Jaisinghani; Editing by Jan Harvey and
Bernard Orr)

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