Connect with us

Favorite News

GameStop stock surges 77% as Robinhood lifts some trading restrictions

GameStop stock surges 77% as Robinhood lifts some trading restrictions


GameStop stock surges 77% as Robinhood lifts some trading restrictions

Jessica Menton
Robinhood blocks purchases of GameStop, AMC and othersAfter days of rallies fueled by Redditors, investment app Robinhood has restricted
the trading of several highly-volatile stocks.Wibbitz – Technology, Wibbitz – TechnologyShares of GameStop and several other speculative stocks like theater chain AMC and BlackBerry rebounded Friday, extending overnight gains after online trading platform Robinhood said late Thursday it will resume limited trading of restricted securities.GameStop soared 78% to $344, clawing back most of its losses after skidding 44% to close at $193.60 Thursday. Shares of the videogame chain slumped a day earlier after Robinhood and other trading platforms took steps to curb wild trading swings in shorted stocks, which angered many customers. Stocks of cinema chain AMC and BlackBerry that have become targets for online traders also gyrated.A fight is raging in the stock market: Should you worry about your 401(k)?’This is going to end badly’: GameStop gamers battle risk in fight against Wall StreetThe overall U.S. market is down again, as the saga that’s captivated and confused Wall Street ramps up the drama.The Dow Jones Industrial Average dropped nearly 600 points after Johnson & Johnson said its one-dose coronavirus vaccine was less effective against some COVID-19 variants. Wall Street’s benchmark S&P 500 index fell 1.9% and the tech-heavy Nasdaq Composite lost 1.8%.The volatile moves in GameStop and other shares came after a spate of trading by small investors of the videogame vendor hurt hedge funds that bet the stock would fall. But by late Thursday, Robinhood said it would allow limited buys of these stocks. “We’ll continue to monitor the situation and may make adjustments as needed,” Robinhood said Thursday.GameStop has been on a 1,900% run over the past three weeks and has become the battleground where swarms of smaller investors see themselves making a stand against the 1%.The assault is directed squarely at hedge funds and other Wall Street titans that had bet the struggling video game retailer’s stock would fall. A couple have already essentially admitted defeat, with one saying Friday it would stop publishing reports on stocks it expects to fall.All the wild action pushed GameStop shares as high as $483 this week, up from $18 just a few weeks ago. It is up 198% for the week heading into Friday.On Thursday, shares of AMC Entertainment and BlackBerry plummeted 56% and 41%, respectively, following the trading restrictions. AMC rallied 70% Friday and BlackBerry climbed 4%.David Trainer, CEO of New Constructs, an investment research firm, doesn’t expect the volatile situation with shares like GameStop to end well for some small-time investors. He anticipates that after GameStop’s meteoric rise, it will likely fall back to about $40 to $50 a share because he doesn’t think the company’s current valuation is justified due to its earnings and growth projections. “The action in GameStop’s stock is a game of musical chairs and my advice for investors is to sell before the music stops,” Trainer said in a note. “As fickle as the trading mob has been to select GameStop as one of their favorite stocks, they could be just as fickle as to when to let the stock drop.”The moves are reverberating across Wall Street, as concerns rise about how much damage the frenzy could do as its effects spill out into the broader market. “While I don’t think the surge in GameStop shares is a signal of euphoria in the broader stock market, the illumination of this reckless and unethical trading environment may be the catalyst behind a near-term stock market correction,” Trainer added.Other forces were also weighing on the market. Johnson & Johnson fell 3.3% for one of the larger losses in the S&P 500 after it said its vaccine appears to protect against COVID-19, though not as powerfully as rivals. Analysts said the results, which would require just one shot instead of the two required by other vaccine makers, were below expectations.Elsewhere, investors watched virus infection spikes in Europe and Asia, renewed travel curbs and negotiations in Washington over President Joe Biden’s proposed $1.9 trillion economic aid package. Hopes are high for Biden’s aid package, but worries grew that the plan might be scaled back under pressure from Republican legislators.The yield on the 10-year Treasury rallied to 1.07% from 1.03% from late Thursday.Stocks fell across Asian and European markets.Contributing: The Associated Press

Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published.


To Top
error: Content is protected !!