“Shares of GameStop and AMC recovered sharply in off-hours trading, after popular online brokerage Robinhood Markets said it would reinstate some trading in shares and options that it curbed on Thursday,” WSJ writes.
The Result: All 13 of the “meme stocks,” which also include BlackBerry and Koss, are up. Some are seeing even more substantial gains.
At the same time, the broader market is under pressure again. Stocks in Asia and Europe are off roughly 1%, while S&P 500 futures fell 1%.
- The pressure is forcing the short sellers to dump their long positions.
GameStop Share Price (9:36 a.m.): $354.35
AMC Entertainment Share Price (9:36 a.m.): $13.25
Here’s what we know.
Robinhood’s CEO Vlad Tenev gave an unclear explanation about why they chose to halt buying (but not selling) on 13 stocks in an interview with CNBC.
- These thirteen stocks included GameStop, AMC, Nokia, American Airlines, BlackBerry, and others.
- He said the SEC, market makers, and hedge funds were not a part of this decision.
- He blamed certain financial requirements such as SEC net capital requirements and clearing house deposit requirements.
Despite blaming these capital requirements, Vlad Tenev denied that there were liquidity problems at Robinhood and said the actions were preemptive.
But it’s also being reported that Robinhood was not going to be able to make the deposit requirements due to the increased trading, so it’s raising $1 billion in new capital from investors.
One of our ROIC members posted some interesting information on our activity feed, saying “Webull, TD Ameritrade, Tastyworks, etc were all forced to stop trading GME, AMC, etc due to the increase traffic they were getting from Robinhood blocking these trades”.
This morning, Robinhood has halted instant deposit trading in crypto seemingly to combat the overnight surge in Dogecoin trading.
It is all very interesting to watch this unfold. I just hope on the other side of this, we maintain the easy access to investing and more transparency.
Just remember that if you choose to buy things like $GME, $AMC, or Dogecoin, you are buying them not because of fundamental investing, but either because you are playing the hype or supporting the ideological battle that is raging.