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
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.
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."
AOC tells Ted Cruz she won’t work with him on Robinhood probe
Graig Graziosi has more on a Twitter response for the ages.
AOC tells Ted Cruz she doesn’t want to work with him on Robinhood probe because he ‘almost had me murdered’
Ms Ocasio-Cortez again called for Mr Cruz to resign
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.
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”.
Billionaire hedge fund boss and MLB owner defiant after GameStop loss and says he’s ‘trying to make a living’
The billionaire said he was 'just trying to make a living’
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.
Reddit founder says GameStop stock market war is ‘seminal moment’ for finance
Mr Ohanian says the GameStop short squeeze is simply the latest in internet communities disrupting the status quo
More on Elon Musk lashing out at short sellers
Tesla boss says the practice is ‘legal only for vestigial reasons’ — Graig Graziosi reports.
Elon Musk lashes out at short sellers during GameStop market war
Tesla boss says the practice is ‘legal only for vestigial reasons’
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.
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.”
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.
GameStop has $11bn wiped off value in wild day of trading
Congress will look into Wall Street and trading apps after Reddit-inspired users restricted by Robinhood
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