GameStop Falls 42% Extra Regardless of Dealer Restrictions Ease, Greater than 80% This Week
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GameStop shares refueled Thursday as the Reddit-powered trade continued to disintegrate.
The stock traded more than 42% lower, bringing the video game retailer’s weekly losses to over 83%.
The most recent drop in price came even after the trading app Robinhood reset some of its trading limits on the stock.
GameStop saw a meteoric surge in a large short squeeze orchestrated by Reddit users last week. Point-and-click investors piled in the names, adding 400% to the stock price, while hedge funds covered their losses from short selling the stock.
Short selling is a strategy in which investors borrow shares of a stock at a certain price, with the market value expected to fall below that level when it is time to buy back the borrowed shares they sold.
Millennial favorite trading app Robinhood, which restricted trading in a handful of shares last week due to the increase in capital requirements of the Depository Trust & Clearing Corporation, now allows 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 shares cannot buy additional shares.
The only other stock holding Robinhood down is AMC Entertainment. Customers cannot buy shares in the cinema operator if they own 5,500 shares.
Washington regulators are investigating the GameStop trafficking craze. Treasury Secretary Janet Yellen said Tuesday she would meet with heads of the Securities and Exchange Commission, the Commodities Futures Trading Commission and officials from the Federal Reserve to discuss “whether recent activities are compatible with investor protection and fair and efficient markets “.
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