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
‘This is beyond absurd’
US politicians and celebrities have joined the growing backlash against Robinhood after the investment app blocked users from buying GameStop, AMC and other stocks on Thursday.
Anthony Cuthbertson reports on the reaction as pressure mounts on the brokerage app.
AOC joins huge Robinhood backlash after it stopped purchases of GameStop
AOC among politicians calling for hearing into app’s decision to block retail investors
Reddit co-founder: ‘This is a seminal moment’
What does Reddit’s co-founder think about his platform’s role in this week’s stock tumult?
Alexis Ohanian says the amateur investor-driven trading frenzy in GameStop shares is a “seminal moment” for the finance industry.
Speaking to CNBC’s Squawk Box, he said: “I do think this is a seminal moment. I don’t think we go back to a world before this because these communities, they’re a byproduct of the connected internet.”
“Whether it’s one platform or another, this is the new normal.”
He added that retail investors are now having their chance to “flex back” at hedge funds.
“We’ve watched the internet now, over the last 10, 15 years thanks to the rise of social media and all this infrastructure, bring a bottom-up revolution to so many industries,” said Mr Ohanian, founded Reddit in 2005 with current CEO Steve Huffman. “We’ve seen this across media, we’ve seen this across so many sectors, and now it’s happening to finance.”
Robinhood sued by customers for restricting GameStop trading
Graeme Massie has the details for The Independent.
Robinhood sued by customers for restricting GameStop trading
Reddit-driven investment had seen stock price spike 700 per cent in just days
Here’s the Ja Rule take on Robinhood
In case you were wondering, Rapper Ja Rule has weighed in on trading app Robinhood preventing individual investors from buying “memestocks”.
Ja Rule weighs in on Robinhood blocking GameStop and AMC stock trades
Twitter users were quick to point out the humour in the rapper offering financial advice after investing in 2017’s famously fraudulent Fyre Festival
Some hard truths from MSNBC’s Stephanie Ruhle
MSNBC’s Stephanie Ruhle reminds Robinhood users: "You are the product. You are not the customer."
Ms Ruhle also points out that while this is a pushback against the establishment, ultimately it may transpire that what Robinhood has done is legal.
Big money still talks.
She adds: "I am not saying it was a popular or nice decision on RobinhoodApp’s part — but can any lawmaker point to a regulation or rule they broke? A law perhaps?
Ms Ruhle is a former Wall Street banker turned news anchor.
GOP Senator: ‘That’s a bubble, that’s gonna burst.’
Republican Senator Pat Toomey finds Robinhood’s actions “disturbing" and warns this will end "badly for most" as with all market bubbles.
Controversy creates strange political bedfellows
It’s not every day that a democratic socialist former bartender and the scion of a billionaire real estate mogul see eye-to-eye on financial policy, but hey, that’s 2021 for you.
Josh Marcus has the story.
AOC and Donald Trump Jr surprisingly agree on GameStop stock controversy
The controversy has made strange political bedfellows
Sherrod Brown: Senate to hold hearing on GameStop situation
Incoming Senate Banking chairman Sherrod Brown announces a hearing on the stock market in wake of GameStop situation.
Senate panel to hold hearing into GameStop stock frenzy
The move follows calls for an inquiry from top Congress members
White House refers press to SEC Statement
Senior members of the US Securities and Exchange Commission released a joint statement regarding the situation.
Acting chair Allison Herren Lee, Peter Driscoll, director of the division of examinations, and Christian Sabella, acting director of the division of trading and markets, said:
We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants.
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