Shares in GameStop plunged by 65% in early trading on Wall Street as the trading mania sparked by small investors, that sent its stock surging and cost hedge funds billions of dollars, lost momentum. The struggling Texas-based video game store chain has been the focal point of a battle by small traders, using forums such as Reddit, to punish Wall Street hedge funds that have bet on certain stocks falling in value. GameStop shares hit a high of $482 last Thursday but slumped to $80 shortly after the market opened. They recovered to $117 by mid-session, down 48% on their opening price. A year ago, shares in the 37-year-old chain, which plans to close 450 stores this year, were changing hands at $3.25 a share. Other heavily shorted stocks also targeted by amateur investors on influential forums such as WallStreetBets on Reddit are also in freefall. AMC Entertainment, the world’s biggest theatre chain and owner of Odeon in the UK, lost 55% shortly after the opening bell on Wall Street. It later made up some of those losses to trade at $8 by mid afternoon. Other companies whose shares were caught up in the frenzy – including Blackberry, Nokia and US retail chain Bed, Bath & Beyond, also all lost ground. Silver, which has also been caught up in the trading frenzy and hit $30 an ounce for the first time in eight-years on Monday – has fallen back , by 12%. Analysts said the size of the silver market makes it much harder to influence than a single stock. “In this case the fundamental drivers are holding, at least for the time being, against the irrationality of markets,” said Carlo Alberto De Casa, chief analyst at ActivTrades. The tumble in GameStop’s shares indicates that the hedge funds betting against it, which had been caught in a “short squeeze” – a situation where they have been forced to buy more shares in a bid to stem their losses – have now closed out their positions. Short-sellers of Gamestop stock took a $20bn hit last month but short interest in the shares – as a percentage of shares available for trading – has plummeted from 114% in mid-January to about 39%, according to data from IHS Markit. “GameStop shares will return to $10 sooner or later once this mania has subsided,” said Neil Wilson, chief market analyst for Markets.com. “With hedges covered the unwind will be brutal.” The US share trader who was the real life Wolf of Wall Street also warned investors they “could lose everything”. Jordan Belfort was jailed in 1999 for insider trading. He had run a “pump and dump” trading scam, based on selling penny shares to gullible investors, which cost them some $200m. His autobiography was later turned into the Wolf of Wall Street movie, starring Leonardo Di Caprio and directed by Martin Scorsese. Belfort, 58 and now an author and motivational speaker, told the BBC that the Reddit investors who had poured their cash into unfashionable stocks which Wall St professionals were betting against should be careful: “If you are looking at this as a way to make your living, you’ll have to catch a falling knife on the way down. I would urge people to take their chips off the table.” He added: “Be aware of being the last person on the bandwagon, that is really the danger here.”