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GameStop, AMC Jump as Robinhood Set to Allow Limited Buying on Friday

Stock Markets Jan 28, 2021 04:33PM ET
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By Yasin Ebrahim

Investing.com – GameStop, AMC, Nokia (NYSE:NOK) and a slew of other so-called meme stocks backed by retail investors jumped in after-hours trade Thursday, after online trading platform Robinhood said it would lift some trading restrictions on the stocks.

GameStop (NYSE:GME) rose 31% to $259 in after-hours trade after closing down 43%. AMC Entertainment (NYSE:AMC) rose 21% to $10.56 after falling 56% on the day. Nokia ended the day down 13.25%, Naked Brand Group Ltd (NASDAQ:NAKD) rose 6% in after-hours trade, while Express (NYSE:EXPR) was up 11% and Blackberry (TSX:BB) climbed 8%.

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

The battle between the short-sellers and the Redditors has intensified in recent days and captivated attention worldwide. But it's not just the "little guy" or retail investor that has been riding the wave of momentum.

GameStop disclosed in a filing with regulators on Thursday that MUST Asset Management, a large shareholder in the company, has sold its entire stake in the company.

The move comes just a day ahead of what will be another wild session of trading. Short options - bets against the price of a stock - are widely expected to expire, forcing another squeeze on the short-sellers that could see them potentially lose billions of dollars.

Earlier in the day, Robinhood and other online brokerages restricted trading in the cohort of "meme stocks," and hiked margins requirements, citing increased volatility.

The move drew ire from retail investors, who filed at least two federal suits demanding it reinstate trading of shares including GameStop, BlackBerry (NYSE:BB) Ltd., Nokia Oyj (HE:NOKIA) and AMC Entertainment Holdings Inc, Bloomberg reported.

Lawmakers on both sides of the political aisle have also chimed in on action, questioning why brokerages had imposed trading restrictions.

Texas Republican Senator Ted Cruz also backed calls for a probe into Robinhood's decision to block retail investors.

As it stands, the Redditors have already drawn proverbial blood against Melvin Capital, with the latter reportedly closing out its short position on GameStop for huge losses earlier this week.

The stage has been set for another wild day of trading on Friday. The Redditors appear determined to "hold the line," a mantra littered throughout Reddit forum "wallstreetbets," seemingly symbolizing a battle cry to fellow holders to avoid selling their positions and caving into pressure.

For all the hoopla surrounding the short-squeeze, there is however the risk that the "little guy" could end up losing a lot more than the wealthier and experienced purveyors of Wall Street.

GameStop, AMC Jump as Robinhood Set to Allow Limited Buying on Friday
 

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Comments (80)
Jorge Garcia
Jorge Garcia Jan 29, 2021 9:47PM ET
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Boycott Robinhood put them out of business.
Fabrice Lange
Fabrice Lange Jan 29, 2021 3:12AM ET
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only bad traders are afraid of this situation. In democracy a new player is always a good thing, isn'it ?
Art Fire
Art Fire Jan 29, 2021 1:29AM ET
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Wallstreet get played and beat in their own game, in their own system, fairly. History should at least recognize their failure (and fire those involved)
Chris Sundo
Chris Sundo Jan 29, 2021 1:22AM ET
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This IS SUCH AN EXCITING TIME FOLKS. -- Marketwatch issued a list of over-short floated % stocks :) I've added to my SKT pos today. -- Love this Black Swan event these days ;)
Dee Engee
Dee Engee Jan 29, 2021 12:48AM ET
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"Limited" just means you can buy until they're losing, then they cut you off "for your own good". Have another trading platform ready if you haven't moved already. Robinhood has shown their true colors, they can't be trusted.
Gregory Me
Gregory Me Jan 29, 2021 12:44AM ET
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I love GME
Gregory Me
Gregory Me Jan 29, 2021 12:43AM ET
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No matter what, we must stick together and after our buy and hold strategy with GME...only AFTER...we must target Robinhood and put them out of business.
David Adinayev
David Adinayev Jan 28, 2021 11:45PM ET
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we like GME
John Truglio
John Truglio Jan 28, 2021 11:42PM ET
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Bought $200 of KOSS at the gym tuesdsy afternoon because it was on an old watchlist and up 100% at $10. Wasn’t any news yet. 15 minutes later news hits and ended up selling it for $550 the next day. Should have held it longer. I bought 25000 shares of DOGE when Musk tweeted he was CEO in december. Already took $400 from that tonight. Robinhood made me wait an hour to close it. I’m just a teacher with a normal portfolio. Didn’t expect this.
Chris Sundo
Chris Sundo Jan 28, 2021 11:42PM ET
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Whoaa .. we need 2b careful not to loose the fresh gains soon later. Take a break soon!! Stay hydrated and BREATHE .. Good 4blood pressure
masterstroke oo
masterstroke oo Jan 28, 2021 11:29PM ET
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I am neither here nor there but all this is affecting legitimate traders as well
 
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