Gamestop (GME) Stock News: GME rises as SEC comments on recent activity

• GME share price rises 60% on Friday as Robinhood lifts certain restrictions.
• SEC comments on recent stock market activity.
• Related stocks AMC, BBBY and BB all rise on Friday.

 

Update: Shares in Gamestop (GME) resumed their recent surge on Friday, bouncing back from heavy losses seen on Thursday. GME shares were up 60% at $314 at the time of writing. Gamestop had fallen on Thursday as numerous brokers put trading restrictions in place on new purchases of GME. But Robinhood said late on Thursday that it would allow “limited buys of these securities”.

The SEC commented on the recent stock market activity, with Reuters reporting SEC Says 'Market Participants Should Be Careful To Avoid' Illegal 'Manipulative Trading Activity' and that the SEC will 'Closely Review Actions Taken By Regulated Entities That May Disadvantage Investors' Or 'Inhibit Their Ability To Trade Certain Securities'.

Update: Gamestop (GME) shares collapsed on Thursday as brokers put restrictions in place on options trading, taking new positions and hiked margin levels. While some measures were to "help" retail investors, particularly increased margin, stopping new position taking appears to have done exactly what the brokers said they were trying to avoid. That is retail traders losing heavily. By taking the buy orders out of the market the Gamestop (GME) share price obviously collapsed, closing Thursday's session at $193.60 from a high of over $500! 

Politicians and celebrities entered the debate. Ted Cruz, Alexandria Ocasio-Cortez and Elon Musk all tweeted demanding to know why trading was restricted. 

The pressure appeared to tell on Robinhood. Vlad Tenev co-founder and CEO appeared on CNBC last night and said Robinhood plans to allow “limited buys of these securities”. “We’re doing what we can to allow trading in certain securities tomorrow morning,” the CEO also said on the CNBC show.

Robinhood released a statement on Thursday saying “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. To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.”

Gamestop (GME) shares are currently trading at $416 during Friday’s pre-market session, a rise of over 100%. 

See more: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial

Gamestop (GME) shares continued moving higher in early trading on Thursday, with GME having broken through $500 in early pre-market trading.

See also Gamestop (GME) Stock Price and Forecast: Are shares going to break $500 today? 

Multiple brokers put restrictions on trading in Gamestop (GME) and related shares on Thursday as the furore over the wallstreetbets phenomenon continued.

Robinhood reportedly put up the following “we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.”

Interactive brokers meanwhile tweeted:

Gamestop (GME) appeared to suffer on the back of these restrictions, with GME shares falling sharply from above $500 to below $300 before the market opened. However normal service was resumed once the regular session began and currently GME is back above $400, having been halted to the upside numerous times.

Wallstreetbets forum on Reddit continues to discuss GME and to add members now accounting over 4 million members and many other readers. 

See also: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial

Short interest still high

S3 partners pointed out that the short interest in Gamestop remains stubbornly high and still above 100%. The initial reasoning behind the move, the short squeeze, remains in place.

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