Uranium gets Reddit meme-stock treatment

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Retail traders from Reddit’s WallStreetBets have pounced on uranium companies as investors wager the nuclear fuel will become a central tool in the decarbonisation of the world’s energy systems, according to Fortune.

Earlier this year, Reddit users made GameStop’s stock soar, much to the annoyance of the hedge funds attempting to short it.

Australian listed uranium miners Peninsula Energy, Energy Resources of Australia and Bannerman Energy stocks jumped by 40 per cent in the past few days. In London, miner Aura Energy jumped more than 75 per cent and Yellow Cake, a company that acts as an exchange-traded fund for uranium, rose 15 per cent. In New York, uranium futures have been at their highest level in seven years, surging 40 per cent over the past month to $42.40.

“The stocks largely stayed level or continued their rise into Tuesday, offering little sign that the rally had reached its end—or even its half-life,” Fortune reported.

“The rally of shares in uranium miners follows on the heels of a buying spree by Sprott Physical Uranium Trust—a Toronto-listed fund that gives investors direct exposure to the metal—which bought some 850,000 pounds of the nuclear fuel last week and 1.4 million pounds the week before.

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“The trust has amassed around 25 million pounds of the metal since its launch in July, a big slice if one considers the total mined supply of uranium in 2019 was only around 120 million pounds, according to the World Nuclear Association.”

Interest in nuclear energy and uranium as decarbonisation tools has been growing. With nuclear power providing reliable, low-cost, low-carbon energy, many countries are considering it as a baseload energy source to be used to fill the gaps of intermittent renewables and replace fossil fuels.

This wager on future energy systems in part pushed forward the rally by r/WallStreetBets, which is home to the same retail traders behind the rise of meme-stock GameStop. Prior to the stock rise in uranium, commenters on the forum were drawing parallels between the video game retailer and uranium.

A new subreddit named r/UraniumSqueeze—dedicated to investors and traders “passionate about the uranium market”—has attracted 14,000 members. It claims to be stricter forum than r/WallStreetBets, saying it will not allow any memes in order to maintain its integrity as a serious place to discuss uranium investing.