GameStop, AMC stocks rise as retail traders look to inflict more pain on Wall Street
GameStop's stock is likely to continue its rally, as it added over six percent in early pre-market trading on the first trading day of the week. It comes after the company's share price jumped 400 percent last week and surged over 1,600 percent for the whole January.
AMC is also expected to open this month with gains, as its shares rose nearly 20 percent. The movie theater operator's stock gained over 200 percent last week.
Both companies are at the epicenter of the Reddit-driven short-squeeze on big hedge funds. A group of small investors united to boost shares of several firms the funds were betting against as they held short positions against the stock. The coordinated action caused a huge price rally and cost the short-sellers on Wall Street billions of dollars in losses.
Robinhood narrows trade restrictions list to 8 companies, including GameStop
Online brokerage Robinhood has cut down the list of its restricted stocks, from as many as 50 on Friday to eight starting Monday. Trade in short-squeeze names like GameStop has been limited due to last week's explosive rallies.
Companies that still face limitations include GameStop, AMC Entertainment Holdings, Blackberry, and others, Robinhood said, noting that the limits may be "subject to change throughout the day."
Opening new positions in those securities is limited, according to its website, which lists the maximum number of shares and options contracts each user can hold. For those whose current holdings already exceed the limits, their positions won't be sold or closed. At the moment, customers can only buy one share of GameStop's stock and five options contracts.
The millennial-favored stock trading app said on Friday it had put buying restrictions in place after its clearinghouse deposit requirements for equities increased last week. "It was not because we wanted to stop people from buying these stocks," Robinhood said.
The trading app, which is popular among retail investors who fostered the rise of GameStop stock, has been under fire for its decision to restrict trading of high-flying stocks that surged after being touted on social media.
On Sunday, US Senator Elizabeth Warren called for a broader review by the Securities and Exchange Commission on recent trading swings. She said a broker-dealer like Robinhood that invites a lot of individual investors needs to operate "under some basic rules."
"You can't do that in the middle of a trading cycle," Warren told CNN about Robinhood's trading limits. "It's not about protecting people from making bad trades. It's about keeping the playing field level."
Robinhood raises another $2.4 billion from investors
Online brokerage Robinhood raised another $2.4 billion from shareholders, just days after existing investors pumped in $1 billion in funding, the Wall Street Journal reported on Monday citing people familiar with the matter.
Robinhood did not immediately respond to a Reuters request for comment.
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