The GameStop (NYSE:GME) saga rolls on.
Shares of video game retailer GameStop, movie theatre chain AMC (NYSE:AMC), Canadian technology firm BlackBerry (TSX:BB), and others, rebounded sharply in pre-market trading Friday after stock trading app Robinhood said it will resume limited trading of the previously restricted securities.
"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 written statement Thursday night.
GameStop shares shot up 119% to trade at $424 in pre-market trading, after closing down 44% to $193.60 during regular trading hours on Thursday. The stock’s high for the week is $483 a share. Robinhood said its decision to restrict trading on Thursday — which angered many investors — was in order to comply with capital requirements mandated by the U.S. Securities and Exchange Commission (SEC) for broker dealers.
Interactive Brokers took similar steps, and both it and Robinhood raised margin requirements on certain securities. It is not unusual to raise margin requirements, but the move to restrict trading was unusual and more extreme, which angered and confused some investors.
In addition to GameStop, the restricted trading sent shares of AMC tumbling 56% and BlackBerry down 41% on Thursday. The influence of retail investors has captivated Wall Street in recent days and speaks to a new class of day traders who sprang up during the COVID-19 pandemic.
Robinhood, whose mission is to "democratize investing," has seen its users jump amid the pandemic, and the app now boasts more than 13 million customers. Its expansion has come with some growing pains, including several outages on key market days.
