GameStop’s fall continues regardless of easing of dealer restrictions, down 30% right this moment and 80% on the week
Jakub Porzycki / NurPhoto via Getty Images
GameStop shares refuel on Thursday as the Reddit-powered trade continues to dissolve.
GameStop’s shares fell more than 30% on Thursday, bringing the brick and mortar video game company’s weekly losses to over 80%.
The drop in prices has been recorded despite the withdrawal of the trading limits by the stock trading app Robinhood.
Last week, GameStop saw a meteoric surge in a large short squeeze orchestrated by Reddit users. Point-and-click investors piled in the names, adding 400% to the stock’s price, while hedge funds covered their losses from shorting the stock.
Short selling is a strategy whereby investors borrow shares of a stock at a certain price, with the market value expected to drop below that level when it is time to buy back the borrowed shares they sold.
The Millennials favorite trading app Robinhood, which restricted trading in a handful of shares last week due to the increased capital requirements of the Depository Trust & Clearing Corporation, now allows its customers to purchase up to 500 GameStop shares. Earlier this week, customers could only buy one share of the company.
However, investors who own more than 500 GameStop shares cannot buy any more shares.
The only other stock holding down Robinhood is AMC Entertainment. Customers can buy up to 5,500 shares in the cinema operator.
Washington regulators are investigating the GameStop trading frenzy that emerged last week. Treasury Secretary Janet Yellen said she will meet with the heads of the Securities and Exchange Commission, the Federal Reserve Board, the New York Fed and the Commodities Futures Trading Commission to discuss recent activities with investor protection and fair and efficient markets are compatible. “
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