GameStop news – live: Stocks soar again as restrictions lifted while under-fire Robinhood gets $1bn injection

Robinhood boss defends GameStop trading restrictions

GameStop’s shares have soared again in pre-market trading, appearing on course to significantly recoup the $11bn lost on Thursday, as under-fire investment app Robinhood partially reversed its decision to restrict trading of its stocks and reportedly secured €1bn from its backers.

The ailing video game retailer found itself at the centre of a battle between small investors self-organised on Reddit, who launched a historic attempt to punish multibillion dollar Wall Street hedge funds looking to short-sell the stocks, igniting a trading frenzy.

Robinhood – which says its “mission is to democratise finance for all” – then decided to block users from buying GameStop shares, which it said was due to “significant market volatility”, prompting a fierce backlash, including from members of the US Congress as politically diverse as Ted Cruz and Alexandria Ocasio-Cortez, who signalled their support for a congressional hearing.

Read more: 


GameStop boss worth nearly $900m

GameStop chief executive George Sherman’s shares in the loss-running retail firm is currently worth some $894m. 

While his 2.3 million shares were reportedly worth $7m a year ago, their value sat at some 127 times that value on Friday morning as the stocks hit $379 in pre-market trading.

Andy Gregory29 January 2021 14:09


Robinhood ‘receives $1bn from backers’

Robinhood has secured an emergency injection of $1bn from its investors, according to The New York Times.

It came after the investment app partially reversed its restriction on the trading of GameStop and others’ stocks, announcing it would resume “limited buys” of certain stocks.

Andy Gregory29 January 2021 13:57


Reddit users claim victory as $13bn hedge fund closes position, accepting huge losses

Hedge funds and others that bet against GameStop have collectively lost more than $5bn, according to data analytics company S3.

Gabe Plotkin, the boss of Melvin Capital – a $13bn hedge fund – told CNBC that his fund had closed its position in GameStop on Tuesday. That came after Melvin Capital’s backers Citadel and Point72 pumped almost $3bn into the fund to keep it afloat.

Our business correspondent Ben Chapman has the details here:

Andy Gregory29 January 2021 13:20


GameStop stocks soar in pre-market trading

GameStop’s stock price currently hovers just below the €340 mark in pre-market trading – a rise of around 74 per cent. 

This puts it on course to significantly recoup the €11bn losses suffered yesterday, during which it fell 44 per cent.

Andy Gregory29 January 2021 13:08


Robinhood boss defends imposing trading restrictions on GameStop

Robinhood CEO Vlad Tenev last night defended his company’s decision to restrict trading on GameStop stocks, saying: “We absolutely did not do this at the direction of any market-maker or hedge fund, or anyone we route to or other market participants.”

He added: “In order to protect the firm and protect our customers we had to limit buying in these stocks.”

Robinhood boss defends GameStop trading restrictions

Andy Gregory29 January 2021 12:59


Malaysian investors drive up price of latex gloves after GameStop battle

Taking inspiration from the uprising centred around GameStop stocks, Malaysian investors have today banded together online to drive up the price of latex gloves.

The country is the world’s largest producer of the functional garments, but the sector has been hit hard by the coronavirus pandemic, with firms becoming the target of short-sellers.

Agence France-Presse reports that shares in leading latex glove manufacturer Top Glove have risen eight per cent on the Malaysian stock exchange after investors established the Reddit group BursaBet – named after the country’s stock market.

Andy Gregory29 January 2021 12:22


What is GameStop and what happened to its stock?

GameStop is a US video game retailer. In the midst of the pandemic, when the company’s physical stores have struggled, it has become a target for amateur traders.

The store was not expected to turn a profit before 2023, but has seen its market value triple to $4.5 billion in three weeks, Bloomberg reports.

GameStop’s stock, as one Reddit moderator told Wired, was “a meme stock that really blew up.” The company was struggling financially both before and after the pandemic, with many analysts suggesting short-selling the stock to profit off its decline.

But a high-profile investment in the stock meant its prices increased, and short sellers found that they had to buy more stock in order to cover their borrowing, known as a “short squeeze”.

Ultimately, because GameStop looked like it was going to fail but did not, the perverse situation meant that individual stock buyers on the WallStreetBets Reddit thread started pushing the stock upwards.

Read more details from our science and technology reporter Adam Smith in this explainer:

Andy Gregory29 January 2021 11:51


Facebook disables popular Robinhood Stock Traders group

Facebook has been accused of playing into the GameStop row after it closed down the popular Wall Street discussion group, Robinhood Stock Traders, in the same week members of the group made headlines for buoying multiple companies’ shares, my colleague Sam Hancock reports.

Allen Tran, a 23-year-old from Chicago who created Robinhood Stock Traders, said he received a notification on Wednesday from Facebook to say the 157,000-member group had been disabled – but supposedly not because of its involvement with the financial shake down. 

The notification, seen by Reuters, said without detail that the group had instead violated policies on “adult sexual exploitation”. Mr Tran rubbished these claims, though, saying he has “never” seen adult content on the group.

Andy Gregory29 January 2021 11:33


Ted Cruz and AOC voice support for Congressional hearing

In a sign of increasingly strange times, Republican senator Ted Cruz has tweeted that he is in full agreement with the position of Alexandria Ocasio-Cortez.

The Democrat branded Robinhood’s decision to suspend the trading of various stocks as “unacceptable”, adding that, as a House Financial Services Committee member, she would “support a hearing if necessary”.

Andy Gregory29 January 2021 11:28


Opinion: GameStop shows that Biden must fix capitalism before it’s too late

The Gamestop debacle this week has reminded us of Biden’s most important mission: to fix capitalism, and make it work for Main Street as well as Wall Street, writes Sid Mohasseb for Independent Voices.

By doing this, he can connect with two opposing camps and become a president for all Americans: on one side he has the ‘social justice’ wing of the Democrats, and on the other the rust belt Trump supporters.

Andy Gregory29 January 2021 11:16


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