After the Robinhood app relaxed limits on trading that outraged rookie investors, GameStop’s stock price exploded once again Friday.
The shares of the video game retailer increased 101 percent to $389.50 as of 6:27 a.m. in premarket trading. As traders tried to talk it up as their golden goose on Reddit’s “WallStreetBets” site.
That put the stock on track to recover more than the 44 percent drop it experienced Thursday as Robinhood barred investors from buying GameStop shares and other companies that were pumped up by the message board of 5.8 million members.
Robinhood reversed course later, saying it would allow traders on Friday to purchase and retain limited numbers of those stocks. The company placed the tightest limits on GameStop. Only five shares or 10 options contracts can be bought by users.
That didn’t stop traders at WallStreetBets from suggesting they would drive the share price of the company up to $1,000 or even $5,000. Through the market volatility, they encouraged each other to hold onto the stock.
“There will be dips today. Expect them,” WallStreetBets user yvngpillow wrote early Friday. “The rich are freaking out and they’re going to do whatever they can to try and save their own asses. They basically have immunity. WE JUST HAVE TO HOLD.”
The fast-growing forum was the launching pad for a stock market populist uprising. Reddit traders have driven up, or invested against, stocks that institutional investors have shortened. As share prices soared, these bets led to hefty losses.
Other darlings of WallStreetBets have managed to surge Friday. After a nearly 57 percent loss Thursday, the movie theatre chain AMC Entertainment rose 54 percent in early trading to $ 13.30. Recently, former smartphone manufacturer BlackBerry rose by almost 16%, while Nokia climbed by around 6% and American Airlines spiked by 13%.
