Robinhood Restricts GameStop Purchases: What You Need to Know
Robinhood, the popular stock trading platform, has implemented restrictions on purchasing GameStop (GME) shares following a significant surge in their price. This measure was introduced after rumors emerged that influential investor Keith Gill might hold a large stake in the company.
Reasons for the Restrictions
The decision to restrict purchases was announced late Sunday, reacting to the news that Keith Gill, also known as “Roaring Kitty,” might own a substantial number of GameStop shares. Gill is a key figure in the 2021 GameStop short squeeze, which led to mass buying of the stock and a sharp increase in its price.
Restrictions on Night Trading
Robinhood announced that Blue Ocean ATS, the platform handling after-hours trading for certain stocks, would only accept orders within 20% above or below the reference price of $22.99. This means any attempts to buy GME above $27.59 or sell below $18.39 during night trading hours will likely be rejected.
Impact on Users
The measures were introduced to facilitate limited trading during extended hours. However, some Robinhood users reported being completely unable to purchase GME at night, causing dissatisfaction among investors.
GameStop’s Surge
After Gill’s information was posted on Reddit, GME jumped nearly 20% in just 20 minutes, reaching $27.58 in Robinhood’s night trading markets. GameStop closed at $23.14 on Friday, May 31, reflecting a 38.8% increase in stock value for the year, apparently influenced by Roaring Kitty’s return.
Robinhood’s restrictions on GameStop purchases come in response to the significant rise in stock prices and Keith Gill’s influence on the market. Investors should stay cautious and informed about these changes to make the best decisions for their investments.
