GameStop spikes 78% after Robinhood removes trading restrictions placed on Reddit-favored stocks
- GameStop spiked as much as 78% on Friday after Robinhood announced it has lifted restrictions on trading in popular Reddit stocks.
- Shares of AMC Entertainment also climbed 17% at intraday highs. Both companies have seen their stock prices fall from lofty highs in recent days.
- Robinhood said restrictions were imposed to meet regulatory requirements.
Shares of GameStop spiked as much as 78% on Friday after Robinhood removed trading restrictions on the stock, which has been at the center of a retail-investor buying spree. Fellow Reddit favorite AMC Entertainment also climbed 17% at intraday highs.
The trading platform informed users of the lift on restrictions in a Friday update on its website.
Both stocks rocketed higher in January after traders on Reddit began buying them to force a squeeze on short-sellers, largely targeting hedge funds that had anticipated a drop in the share prices. GameStop shares hit an intraday high of $483 on January 28 and AMC shares reached an intraday high of $20.36 on January 27.
Robinhood a few days ago rolled back restrictions on purchases of shares in the companies, when traders could buy up to 100 shares of GameStop and 1,250 shares of AMC. The previous limit was set at 20 shares for GameStop and 350 for AMC.
Robinhood has previously said it had to block purchases to meet a tenfold increase in deposit requirements mandated by clearinghouses registered with the Securities and Exchange Commission. Lawmakers and investors heavily scrutinized Robinhood's decision to impose trading limits.
