The wild Reddit GameStop ride may now be over, say analysts, as Robinhood further eased trading restrictions. The stock, which peaked at close to $500 per share, has now fallen to a little over $90.
Redditors in r/wallstreetbets had been urged to hang in there, in the belief that more investors who had shorted the stock would be forced to pay high prices to exit their positions, but this no longer looks likely …
Reuters reports.
The remaining price inflation is likely to be due to those who need to close out options, while those who simply took short positions in the stock now appear content to await the return of normality.
Stocks at the heart of a recent social media-driven buying frenzy were subdued in early U.S. trading on Thursday, a possible signal that wild gyrations which roiled financial markets were fizzling out just as regulators meet to discuss the volatility.
Shares of videogame retailer GameStop Corp were up 4.3% after losing 72% of their value on Monday and Tuesday combined. They closed up 2.7% at $92.41 on Wednesday […]
Thursday posts on Reddit implored investors to hang on, although many analysts think the squeeze is probably over and broader market attention has begun to turn to the possible fallout […]
Fee-free online broker Robinhood, which has been at the center of the phenomenon, has further relaxed trading restrictions on the hottest retail-trader stocks before U.S. markets open on Thursday. Traders can now buy as many as 500 GameStop shares […] The limit on AMC shares was set at 5,500 and buying limits on other stocks were removed.
The Securities and Exchange Commission (SEC) is investigating whether there were any instances of fraud. This will include examining whether there was any collusion between Robinhood and Citadel, but may also mean determining whether those behind the Reddit thread were guilty of market manipulation. One analyst thinks the latter is unlikely, because lawmakers never imagined anything like this.
Robinhood’s CEO is due to testify to Congress later this month.
Andrea Cicione, head of strategy at TS Lombard, [said,] “The reason this might not be covered by regulation yet is simply because it has never happened before. But now it might find its way into regulation in a more explicit way.”
Photo by energepic.com from Pexels
