As it happenedended1611882458

Gamestop stock news: Robinhood boss defends trading halt as investors set to get access back

Hedge funds, Gamestop, Reddit investors explained

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.

1611869665

Robinhood to allow limited buying of restricted stocks

On Friday, online brokerage Robinhood will allow “limited buys” of securities that were restricted on Thursday.

The firm said in a statement: “Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.”

Shares in the effected companies, including GameStop and AMC, jumped in extended trading on the news.

GameStop’s share price rose 28 per cent to $247 after the closing bell.

1611870229

More from Mr Belfort

To Redditors he says: "Be a bit smarter with the companies you pick."

 

"This is a great strategy you have going ... They should keep doing it."

1611870649

AOC tells Ted Cruz she won’t work with him on Robinhood probe

Graig Graziosi has more on a Twitter response for the ages.

1611871369

Rep Ilhan Omar: ‘Strange things happen’ when the profits of billionaires are threatened

Democrat representative Ilhan Omar is clear where she stands on the possibility that the public was deliberately cut off from buying stocks to protect short positions of hedge funds.

1611871729

Defiant billionaire says he’s ‘trying to make a living’ after GameStop loss

Steve Cohen, owner of the New York Mets, took some abuse on Twitter, but defiantly told his detractors to “keep bringing it”.

1611872749

A ‘seminal moment’ for finance

Reddit has found itself at the centre of a stock market war of attrition, as investors from its WallStreetBets forum attempt to "shot squeeze" a group of hedge funds attempting to short sell GameStop stocks.

Graig Graziosi reports on what Reddit co-founder Alexis Ohanian had to say about his platform’s role in this week’s market moves.

1611873820

More on Elon Musk lashing out at short sellers

Tesla boss says the practice is ‘legal only for vestigial reasons’ — Graig Graziosi reports. 

1611877292

Jon Stewart joins Twitter and uses first post to defend GameStop investors

“This is bull***t. The Redditors aren't cheating, they're joining a party Wall Street insiders have been enjoying for years. Don't shut them down...maybe sue them for copyright infringement instead!!” the former Daily Show host tweeted.

“We've learned nothing from 2008.”

The Twitter account is not officially verified by the social media giant, but quickly picked up more than 65,000 followers, including Alexandria Ocasio-Cortez and Barack Obama’s former speech writer Jon Favreau.

1611879998

Robinhood boss defends GameStop trading restrictions

Robinhood CEO Vlad Tenev said the investment app’s restriction of GameStop trading was in the best interests of his company and users.

“In order to protect the firm and protect our customers we had to limit buying in these stocks,” Mr Tenev told CNBC’s Andrew Ross Sorkin.

“Robinhood is a brokerage firm, we have lots of financial requirements," he added.

 "We have SEC net capital requirements and clearing house deposits. So that’s money that we have to deposit at various clearing houses. 

“Some of these requirements fluctuate quite a bit based on volatility in the market and they can be substantial in the current environment where there’s a lot of volatility and a lot of concentrated activity in these names that have been going viral on social media.”

1611881110

GameStop has $11bn wiped off value in wild day of trading as Reddit-inspired investors restricted

GameStop stock saw $11bn wiped off its share price during a wild day of trading after the Robinhood app restricted Reddit-inspired investors.

The volatility of the video game retailer’s stock and the role of online trading platforms will now be the subject of investigations by lawmakers in both the House and Senate.

Graeme Massie has more.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in