GameStop Nosedives on Restrictions by Robinhood, Other Platforms

GameStop whiplashes after restrictions imposed by Robinhood and other trading platforms. Other short-squeeze shares drop sharply.
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GameStop  (GME) - Get Report continued its whiplash ways Thursday, tumbling, rising, and then sinking again after trading platforms like Robinhood limited transactions in the shares.

Shares of the videogame retailer at last check were tanking 62% to $132. 

AMC Entertainment  (AMC) - Get Report and Bed Bath & Beyond  (BBBY) - Get Report, two other heavily shorted stocks, were still dropping sharply in early Thursday trades. AMC was off 67% and Bed Bath & Beyond was down 37%.

The activity was sparked largely by the Reddit-based chatroom Wallstreetbets.

Menlo Park, Calif.-based Robinhood said on its blog that it added new limits to its app to restrict users from trading any of the popular Wallstreetbets stocks.

BlackBerry  (BB) - Get Report, Nokia NOK, Koss  (KOSS) - Get Report, and Naked Brand Group  (NAKD) - Get Report are also on the list. BlackBerry and Nokia were falling, while Koss and Naked were soaring.

Charles Schwab’s  (SCHW) - Get Report TD Ameritrade also has been limiting some transactions on shares of GameStop, AMC and others. 

"We have placed restrictions on some transactions in $GME and other securities," a spokesperson said in an email. "Restrictions, which differ from security to security and are subject to change, may include actions like increasing margin requirements, or limiting certain types of transactions, like short sales and those that may involve unlimited risk."

The spokesperson said "we have made what we believe to be prudent and appropriate decisions to place some limits on certain transactions for certain securities."

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GameStop shares had soared to a record Thursday, touching $500 each in pre-market trading. 

"Preventing anyone from trading a publicly traded stock sounds to me like an illegal act of market manipulation to assist the people betting against the stock," one commenter complained on Robinhood's Twitter page.

"Everyone who sees this, find a new broker. Robin Hood has chosen their side of history, and it's not ours!!! They have completely blocked all purchases for literally every stock that was even remotely mentioned on WSB Reddit," another complained.

The premarket surge followed a brief outage for Wallstreetbets, which has been identified as the source for much of the stock's popularity since it began its ascent on Jan. 12.

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