GameStop’s Stock Surges 75% After Robinhood Lifts Trade Restrictions
GameStop’s wild week on Wall Street continued on Friday, with the gaming retailer’s share price darting 75% higher during early trading. The surge coincides with Robinhood, the popular stock trading app, allowing users to once again trade GameStop and other “Reddit stocks” like AMC and BlackBerry on a limited basis, following the company’s move a day earlier to block users from trading those same securities.
About 90 minutes into trading Friday, GameStop’s stock had moved from $193.60 to $338.54 per share. That actually marked a bit of a drop from the first few minutes of trading, too, when GameStop’s shares opened at about $380 and quickly moved to $413.98 per share before dropping down. The overall spike, if held through the rest of the day, would offset much of Thursday’s losses for GameStop, when the company dropped 44% thanks in large part to RobinHood blocking users from buying shares.
GameStop’s recent surge, via Google
RobinHood CEO Vlad Tenev, in an interview with CNBC on Thursday night, said the app restricted trading “in order to protect the firm and protect our customers.”
Many GameStop shareholders, though, were furious with the app for blocking trading at a time when the company’s share price had darted from about $20 per share to north of $340 in less than two weeks. On Wall Street Bets, the Reddit forum that’s helped spur GameStop’s massive run, “f— Robinhood” quickly became a rally crying for many users, some of whom said they’ll never use the app again. GameStop was already a WSB darling heading into Friday, though, with many investors piling into the company in recent weeks as they look to trigger a short squeeze against hedge funds betting against the retailer’s success.
After getting skewered for blocking trading on Thursday, RobinHood walked back its decision, at least partially on Friday, with users being allowed to buy 5 GameStop shares or 10 options contracts. RobinHood late on Thursday announced it had raised $1 billion to help cover the recent trading frenzy.
For more details on how GameStop and AMC are part of a “David versus Goliath” battle between Reddit true believers and hedge funds betting against their success, click here.
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