GameStop, AMC Entertainment remain volatile in premarket trading on Monday
- GameStop, AMC Entertainment remain volatile in premarket trading on Monday.
- Robinhood continues to severely limit trading in several stocks, including GameStop.
- CEO Vladimir Tenev explains why Robinhood had to restrict trading in volatile stocks.
GameStop Corp (NYSE: GME) shares on Monday remained volatile in premarket trading as the Reddit-fuelled retail trading frenzy continued. The Grapevine-based company was reported about 18% up before market open on Monday but lost close to 7% later on. The stock gained roughly 1800% in January.
The frenetic trading has so far resulted in a nearly £14.60 billion of loss to hedge funds, including Melvin Capital Management, that lost 53% last month on its short positions in GameStop, AMC Entertainment, and several other stocks.
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AMC Entertainment Holdings (NYSE: AMC) was also seen about 20% up in premarket trading on Monday. Senator Elizabeth Warren commented on the unprecedented market volatility last week and said:
“We need an SEC that has clear rules about market manipulation and then has the backbone to get in and enforce those rules. To have a healthy stock market, you’ve got to have a cop on the beat.”
Robinhood continues to severely limit trading in GameStop, AMC, and other stocks
Meanwhile, Robinhood and many other online trading platforms are still severely limiting trading in a number of stocks, including GameStop, AMC Entertainment, Koss Corp, BlackBerry, Nokia, Naked Brand Group, Express, and Genius Brands International.
In premarket trading on Monday, Koss Corp traded about 1% up, BlackBerry about 6% up, and Naked Brand Group and Genius Brands International about 10% up each. Nokia opened at a per-share price of £3.44 and touched a high of £3.58 per share on Monday. Robinhood currently allows its users to only buy one GameStop share – a move that has been broadly criticised in the recent week.
CEO Vladimir Tenev explains why Robinhood had to restrict trading in the volatile stocks
CEO Vladimir Tenev of the Menlo Park-based investment firm turned to Clubhouse for an audio chat with Tesla’s Elon Musk on Sunday to explain why Robinhood had to restrict trading in the volatile stocks. According to Tenev:
“We had no choice in this case. We had to conform to our regulatory capital requirements. There is a rumour that Citadel or other market makers pressured us into doing this and that’s just false. This was a clearinghouse decision, and it was just based on the capital requirements. From our perspective, Citadel and other market makers weren’t involved in that.”
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