Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
The rallies in the shares of GameStop and AMC are outpacing the broader US stock market indices these days.
Major American brokerage firms are beginning to pull the plug on the trading of the insanely bullish shares of the American video game, consumer electronics, and gaming merchandise retailer GameStop Corp (NYSE: GME), Canadian enterprise software, and the Internet of things multinational, BlackBerry Ltd (NYSE: BB) and AMC Entertainment Holdings Inc (NYSE: AMC). As reported by MarketWatch, the halt came after the shares of these firms were pumped by an influence of a Reddit chatroom dubbed r/wallstreetbets (r/WSB) resulting in over 700% share gain for GameStop in the past 2 weeks.
Of the firms that have halted the trading of GameStop shares is TD Ameritrade, citing the need to mitigate risks for its clients.
“In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME, $AMC, and other securities,” a spokeswoman for TD Ameritrade told MarketWatch, referring to the ticker symbols of the companies. “We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors.”
The shares of these firms got their pumps in what appears to be a duel between institutional short-sellers and a group of retail investors who formed a unifying front on the r/WSB chatroom with the sole aim of pushing the shares to beat the short sellers to their game. The efforts of the Redditors have yielded fruits thus far but the halts in the trading of these stocks have ushered in an unprecedented censorship.
Reuters also reported that the New York Stock Exchange (NYSE) briefly paused the trading on GameStop and AMC on Wednesday while the Investment Industry Regulatory Organization of Canada (IIROC) announced at 9:54 a.m. ET on Wednesday a temporary suspension of BlackBerry shares.
GameStop, AMC Shares Outpacing the Broader Market
The rallies in the shares of GameStop and AMC are outpacing the broader US stock market indices. With the triple-digit growth recorded by both stocks in the past 24 hours, their performance dwarfs that of the Dow Jones Industrial Average (INDEXDJX: .DJI) which is down 2.05% in the past 24 hours.
The S&P 500 (INDEXSP: .INX) also shed 98.85 points atop a 2.75% dip to 3,750.77. The Nasdaq Composite (INDEXNASDAQ: .IXIC) also saw a drag down with a 2.61% dip to 13,270.60. With the broader market coasting away with these dips, many industry experts are bemoaning the imbalance in the market with calls for the authorities to wade in, and possibly influencing the halts in the trades.
William Galvin, Massachusetts’s secretary of the commonwealth told Barron’s in an exclusive statement noting that he is keeping a close watch on the events around the stocks. “This is certainly on my radar,” Galvin said. “I’m concerned because it suggests that there is something systemically wrong with the options trading on this stock.”
Other news from the stock markets can be found here.