It’s almost been year to the most shocking news for stock market investors that broke at the beginning of last year. On Thursday, January 28, 2021 retail brokerages halted trading in GameStop (GME), AMC Entertainment Holdings (AMC) and other stocks engulfed in a frenzy that had enthralled Wall Street and resulted in significant losses for hedge funds.
Investors will be able to sell only their existing positions in some situations, according to free stock trading leader Robinhood and Interactive Brokers. On certain securities, both brokerages increased margin requirements.
In a blog post, Robinhood informed clients that it would automatically close out some of the positions if the client lacked the requisite collateral. On Friday, the Menlo-Park, CA-based firm planned to permit limited purchases of these securities.
GameStop’s stock initially reversed its gains after the announcement, quickly falling into negative territory. The stock fell 44% during Thursday’s trading session after briefly trading above $500 in pre-market trading.
“We’re committed to helping our customers navigate this uncertainty. We fundamentally believe that everyone should have access to financial markets. We’re humbled to have helped many people invest in the markets for the first time. And we’re determined to provide new and experienced investors with the tools and resources to help them invest responsibly for their long-term financial futures.”
– Robinhood mentioned in a statement.
The next day’s update
Stocks belonging to Robinhood’s restricted trading list soared on Friday after the online brokerage announced that it would resume limited trading in highly shorted stocks.
Shortly after the market’s opening bell, GameStop skyrocketed by about 113% to its session high. Due to the stock’s high volatility, trading was halted. GameStop fluctuated in erratic trading throughout the afternoon, eventually closing 68 percent higher. The stock increased by 400% in one week.
Koss has made a massive 52% gain. AMC Entertainment and Express both increased by 54% and 28%, respectively. Each stock had previously been suspended owing to high volatility. Naked Brand Group increased by 18%.
For several of the equities, Friday’s rally reversed large losses from the previous session, which came after Robinhood and other retail brokerages imposed restrictions on a number of stocks, including the ability to only sell new shares in some situations.
Lifting of restrictions
On Monday, February 1, 2021, ahead of the market open, Robinhood dropped its trading limitations on 50 businesses to eight. The list then included: GameStop, AMC Entertainment, Express, Blackberry, Koss Corporation, Genius Brands International, Nokia and Naked Brand Group.
After a difficult week in the markets, Robinhood lifted interim trading restrictions on all equities, including AMC Entertainment Holdings and GameStop on February 5, 2021.
Late Thursday, the business posted an update concerning the matter on its website, saying: “There are currently no temporary limits to increasing your positions.”
AMC and GME since then
The AMC stock gained by a huge 135% till date if we consider today’s market trading prices. Although the change might differ the next minute since the stock market is relatively volatile. After all restrictions were lifted on February 5, 2021, the AMC stock closed at $6.83. Today, it was down by a huge 10.68% traded at $16.05 (down by 1.92 points) at 10:00 a.m. ET. The market capitalization stood at $8.6 billion.
Earlier last week, AMC stock dropped around 9%, going below $20 as the market opened after a 3-day weekend on Tuesday. The shareholders also started getting their ‘I Own AMC’ NFT for free, but this could not pull the stock out of the bearish pit. The stock had plunged around 17% in the last five days before the aforementioned holiday and traded at $18.68, down 1.88 points (-9.14%) on January 18, at 12:23 p.m. ET.
The GME stock has gained over 46% since the lifting of restrictions. The stock closed at $63.77 on February 5, 2021. Today, the stock was down substantially. The share prices came down by 12.15% and traded at $93.44 (losing 12.92 points) at 10:26 a.m. ET. The market valuation of the company stood at $7.2 billion.
Earlier, on January 6, 2021, the Wall Street Journal reported that GameStop Corp. (GME) is launching a division to develop a marketplace for non-fungible tokens (NFT) and establish cryptocurrency partnerships, according to people familiar with its plans. The GameStop shares were up by over 30% in the post-market trading session that day.
These ‘meme stocks’ are sometimes in trend and other times they aren’t. Now, these major stocks are dipping, however, they might reverse the course really soon.
