Kamis, 28 Januari 2021

Robinhood restricts trading in shares including GameStop amid dizzying run-up - CBC.ca

The strange saga of GameStop took a new twist on Thursday, as trading brokerage Robinhood put restrictions on trading in the company's shares, a move that's sure to draw the ire of the app's merry band of stock-swapping Redditors.

The trading app has exploded in popularity this year by offering free trading, fuelling a boom in retail investor activity.

That boom is itself being driven by online stock message boards, including an influential one on Reddit, that has pushed the price of GameStop shares up exponentially in recent weeks, costing Wall Street firms caught on the other side of the trade billions.

But Robinhood pumped the brakes on the frenzy on Thursday, telling its users it would be "restricting trading" in shares in a number of companies that have seen feverish gains, including GameStop, BlackBerry, Bed Bath & Beyond, Nokia and others. Shares in all of those firms have more than quadrupled this year, driven by a frenzy of retail investors.

Robinhood said trading in the affected shares will be limited to traders looking to close out their positions in them. That means holders of the shares can sell them, and shorts can buy them to cover their positions, but any other type of trading will be restricted.

"We also raised margin requirements for certain securities," Robinhood said, which means traders will see new limits on how much money they are allowed to borrow to buy certain shares. That will also have the effect of making the shares harder to buy.

GameStop shares rose another 20 per cent to $415 a share on Thursday morning, a fairly muted increase compared to recent days. At the start of 2021, the company was worth barely $20 a share, but that was before a history-making short squeeze.

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2021-01-28 15:53:00Z
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