Robinhood lifts GameStop restrictions as U.S. markets close in on best week since November
Wall Street rung in the day with optimism despite a disappointing jobs report, which showed that the U.S. economy added a modest 49,000 jobs in January, signaling the labor market continues to falter amid the coronavirus pandemic. Just over half of the 22 million jobs lost at the beginning of last year have been recovered.
Robinhood, the popular online trading platform, announced Thursday that it had lifted all stock-buying restrictions on GameStop and the other sought after names including AMC Entertainment and Blackberry.
GameStop shares rose by 26 percent Friday morning, at about $67. But the stock has suffered in recent days, shedding 42 percent on Thursday, and falling more than 80 percent from last Friday’s close of $325. The stunning losses followed spectacular gains last month, which drew in many new investors chasing the hype and potential profits. GameStop shares ballooned by 1,600 percent in January.
The astounding levels of trading provoked an alarmed reaction from brokerage firms and securities regulators.
Amid the chaos, Robinhood and other trading platforms blocked investors from purchasing GameStop for a time, and then set limits to the number of shares customers could purchase. While Robinhood has said it restricted the stocks to follow rules on capital requirements, the moves triggered dramatic price drops for GameStop. Traders, members of Congress and business leaders have lashed out against Robinhood, which appeared to them as tying the hands of clients in the middle of a trading frenzy.
“There are currently no temporary limits to increasing your positions,” stated Robinhood’s investing webpage as of Thursday morning. AMC rose by 2 percent.
If the positive momentum in the broader markets holds, the major averages will notch their best weekly performance since early November when election results revealed that Joe Biden would become president. This week, the Dow, the S&P and the Nasdaq have increased by 3.6 percent, 4.2 percent and 5.4 percent, respectively.
