Robinhood will allow “limited buying” of GameStop and AMC tomorrow, the company announced late Thursday.
The soaring GameStop stock took a hit on Thursday as the free trading platform Robinhood froze the stock along with AMC. GameStop‘s stock – which traded as low as $2.80 in April 2020 – peaked at $467 this morning as Reddit users continued to pummel short sellers. GME retreated during the day as Robinhood froze the stock, but it has since regained some of the day’s losses in after-hours trading. It’s up nearly $100 in after-hours trading.
Robinhood also froze AMC’s stock on Thursday. The stock fell throughout the day but is up so far during after-hours trading. Both stocks had after-hours rallies following Robinhood’s announcement that it would allow “limited buys” of GameStop and AMC on Friday.
Robinhood released the following statement in an email to its customers:
It’s been a tough day, and we’re grateful to you for being a Robinhood customer. In light of the extraordinary market conditions this week, we temporarily limited buying for certain securities this morning. Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
This was a temporary decision made to best continue serving you, and was not an easy one to make. We know it’s led to frustration and confusion, and wanted to provide some clarity.
As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
To be clear, this decision was not made on the direction of any market maker we route to or other market participants.
The past year in particular has shown us that the financial markets are for everyone—not just institutional investors and hedge funds. We’ve seen a new generation enter the market, and they’re sparking conversations about what it means to be an investor. We stand in support of you, our customers. Democratizing finance for all means giving more people access, not less.
We’ll keep monitoring market conditions and will update this Help Center article with the latest changes. We also published a blog post regarding today’s events.
Thank you again for being a Robinhood customer. We’re so grateful for your support.
The information in this article is provided purely for informational and entertainment purposes only. Speak to a financial professional for stock trading tips and financial advice.