By
Temitope Olatunji
April 18th, 2024
Robinhood revealed that the limited trading of previously restricted securities would be resumed on Friday.
GameStop Corporation (NYSE: GME) stock closed at more than a 40% loss after Robinhood and other brokers suspended the stock trading on their platforms. On the 28th of January, GME soared in a parabolic rally as several retail traders were short-selling the company’s stock as a result of a Reddit message board WallStreetBets. However, the situation has changed when it was revealed that Robinhood would allow limited buying of the restricted stocks.
As a result, GME stock is up over 100% today in the pre-market.
Robinhood and other Brokers Halt GameStop Trading
After trading hours on the 28th of January, GameStop closed at $193.60, a decline of 44.3% over its close on the 27th of January. During trading hours, GME recorded both gains and losses. The stock was up more than 25% at a point and plunged more than 60% on the same day.
As a result of GME volatility throughout the day, trading was halted several times. GameStop is currently trading at $392, with a 102% increase over its previous close of $193.60.
Data by MarketWatch revealed that GameStop has been surging all year. According to the data, GME stock has grown 4,826% over the past year. In its year-to-date record, the company has gained 927.60%. Also, GME has jumped 1,550.47% in the last three months and 927.60% over the past month. GameStop has also advanced 349.92% in the last five days.
Apart from GameStop, AMC Entertainment Holdings Inc (NYSE: AMC), BlackBerry Ltd (NYSE: BB), and Koss Corporation (NASDAQ: KOSS) are demonstrating enormous price movements.
Also on the 28th of January, AMC Entertainment stock plunged 57% but is 68% up now. BlackBerry stock, which pulled in significant gains, eventually shed 42% but gained 20% today already. Koss stock lost 28% yesterday but now it is 110% up.
In a statement, Robinhood commented on the recent happenings. Referring to the meteoric rise in the stocks of some brands, the company said:
“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 $AAL, $AMC, $BB, $BBBY $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities.”
Regulators Monitor GameStop Price Activity
Robinhood also noted that the dramatic surge may not stop until exchanges and regulators “halt or put certain symbols into liquidation only.”
Nasdaq CEO Adena Friedman said the company may also halt the trading of any stock with “unusual activity.”
The GameStop price activity also got the attention of the US Securities and Exchange Commission (SEC). The Commission said that it is “actively monitoring” the price performance.
Speaking to CNBC’s Joe Kernen on Squawk Box, Billionaire investor David Tepper sent out a warning to investors. He said:
“It was ‘party on dot-com’ in 1999 that screwed the shorts, and now it’s a gang up inc.’ It didn’t end well in 1999 when the dot-com bubble popped. Been there, done that. Old scar.”
The recent GameStop surge has also generated bullish comments on Twitter as some users compared GME with Bitcoin. A Twitter user said GameStop is going to be the new Bitcoin.