Game on again? Gamestop shares jump to brink of $400 in pre-market trading as Trading 212 app lifts its block on the controversial stock
- The shares moved back up to as high as $393 (£286) in pre-market trading
- Reddit-fueled meteoric rise was reversed yesterday after Robinhood blocked it
- UK investors can buy it again through Trading 212 after it lifted its block
Gamestop shares are set to resume their dramatic rise today after climbing in pre-market trading overnight.
The stock has moved back up to as high as $393 (£286), a jump of more than 100 per cent from the US market close last night.
The controversial firm is still at the centre of a stock market storm created by a clash between a Reddit investing group and some Wall Street hedge funds.
Gamestop shares moved back up to as high as $393 in pre-market trading overnight
Popular US trading app Robinhood is embroiled in the controversy after it blocked its users from buying Gamestop shares, and now faces a number of lawsuits from angry users.
Meanwhile Trading 212, which is the closest thing to Robinhood available in the UK at the moment, has reopened trading in the US video games retailer’s shares this morning.
To many of its users’ exasperation, Trading 212 blocked buys of Gamestop yesterday due to ‘unprecedented demand’ overwhelming its capability to execute trades. It also closed off new user registrations.
In a statement on Twitter the company said: ‘We’ve now enabled the trading of Gamestop and AMC Entertainment which was initially restricted by our execution intermediary.
‘However, we’d like to warn you about the high risk of long execution disruptions for both buy and sell orders caused by the extreme market activity.’
Joshua Mahony, an analyst at IG noted: ‘While the focus has been upon a coordinated move in highly shorted stocks such as AMC and Gamestop, there is a wider theme here where retail traders see their power to move markets in much the same manner as the hedge funds have done in the past.’
‘The 2020 market collapse appears to have quickened the pace of adoption for new traders, and there are plenty of signs to show that this new generation refuse to play the game according to prior norms.
‘One thing is for sure, the Reddit generation have brought significant volatility for markets and provide yet another risk factor to consider for traders.’
Robinhood is facing lawsuits from angry users after it blocked buys of Gamestop shares
‘While the brawl between retail speculators and hedge funds over GameStop has been distracting and at times bewildering, we see it more as being a localised tussle over a highly-contested stock, than something with broader or enduring market significance. ‘ added Paul O’Connor, at Janus Henderson Investors.
‘Equity markets have, of course, seen a few days of significant volatility, as these battles played out, but the overall impact on long-only investors, quant funds and macro investors has been modest.’