Gamestop stock news: Robinhood boss defends trading halt as investors set to get access back
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Video game retailer GameStop’s stock price has been on a rollercoaster this week due to the actions of users on the WallStreetBets subreddit and the subsequent blocking of their ability to buy stock by several online brokerages.
The Reddit users pushed the stock up from $20 on 11 January to a high of $146.97. At its peak on Thursday morning, the stock was valued at 468.49. Other stocks with a similar profile to GameStop - firms that have struggled in the pandemic - have also soared in value including Bed, Bath & Beyond, AMC, and Nokia.
The decision by online brokerage Robinhood and others to stop the purchase of a number of stocks by amateur investors led to a sharp backlash online and a demand for an investigation by both market commentators and lawmakers.
After the morning surge in value in pre-market trading, stock in GameStop dropped sharply as markets opened on Thursday, before climbing again. By lunchtime it was down 32 per cent, eventually closing down 44 per cent wiping out almost $11bn in market value.
However, Robinhood announced it will allow limited purchasing of the restricted stocks on Friday causing a bump in the value of shares after the closing bell.
Was this Wall Street’s equivalent of a populist uprising as some are saying or were other forces at work? Elizabeth Warren questioned the David vs Goliath narrative in her calls for more regulation and a sharper toothed SEC.
Both the House and the Senate will now hold hearings into what transpired.
Follow all the latest in our rolling coverage.
- GameStop shares surge 40% before dropping sharply as Reddit-fuelled rollercoaster continues
- GameStop: Reddit users claim victory as $13bn hedge fund closes position, accepting huge losses
- ‘You stand for everything I hate’: Reddit WallStreetBets posts open letter to Wall Street Hedge Funds
- How the internet is reacting to GameStop, Reddit and Wall Street debacle
- GameStop: How a fight between Reddit users and Wall Street saw video game company’s stock increase tenfold
GameStop: The fight between Reddit users and Wall Street
Adam Smith explains why everyone is talking about GameStop.
How GameStop’s stock grew tenfold from a fight between Reddit users and Wall Street bankers
The subreddit r/WallStreetBets pushed the retail company’s stock so that ‘everybody was making money’
Robinhood app halts trading of GameStop, AMC and other stocks as hedge funds face losing billions
Discount stock brokerage Robinhood has removed GameStop, AMC, BlackBerry, and Nokia from the trading platform, according to users.
Only holders of the stock are allowed to sell. A message on the relevant pages on the site tells users that they can close out their position on the stock, but cannot purchase additional shares.
The action was taken before the opening of the markets in the US on Thursday.
Those individual stocks have all surged in value in recent days as amateur daytraders used Reddit forums to organise buying up shares to push prices higher.
Their collective action has triggered huge losses for hedge funds.
Statement from Robinhood
Trading platform Robinhood released the following statement on in its blog:
Our mission at Robinhood is to democratize finance for all. We’re proud to have created a platform that has helped everyday people, from all backgrounds, shape their financial futures and invest for the long term.
We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.
Amid significant market volatility, it’s important as ever that we help customers stay informed. That’s why we’re committed to providing people with educational resources. We recently revamped and expanded Robinhood Learn to help people take advantage of the hundreds of financial resources we offer and educate themselves, including how to make sense of a volatile market. In 2020, more than 3.2 million people read our articles through Robinhood Learn.
We’re committed to helping our customers navigate this uncertainty. We fundamentally believe that everyone should have access to financial markets. We’re humbled to have helped many people invest in the markets for the first time. And we’re determined to provide new and experienced investors with the tools and resources to help them invest responsibly for their long-term financial futures.
GameStop and AMC shares fall at market open
The fall comes after platform restrict trading of shares in the companies.
A rollercoaster opening for GameStop
Ben Chapman reports as the market opens in the US.
GameStop shares surge 40% as Reddit-fuelled mania continues
Stock surges to $490 after astonishing rally inflicts huge losses on short-selling hedge funds
Interactive Brokers also halts purchases of some stocks
Online brokerage Interactive Brokers has put a number of shares, including GameStop and AMC, in a "liquidation only" mode due to “extraordinary volatility in the markets".
ICYMI: Hedge fund closes short position, Reddit users claim victory
Melvin Capital closes short position after social media users push struggling games retailers shares to meteoric rise.
Reddit users claim victory as $13bn hedge fund capitulates on GameStop
Melvin Capital closes short position after social media users push struggling games retailers shares to meteoric rise
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