Shares in GameStop Corp. and AMC Entertainment Holdings Inc. rebounded in premarket trading after Robinhood Markets Inc. removed limits on buying the two stocks, which have been at the center of the battle between Reddit-empowered retail traders and short-sellers.
Robinhood’s move, announced in an update on the trading platform’s support page, comes a day after it increased limits on purchases of the two stocks. GameStop has plunged 84% so far this week while AMC has tumbled 47% as retail traders flocked to other corners of the stock market, such as small drug developers.
Both shares rose in premarket trading on Friday, with GameStop up 9.8% and AMC up 5.6% at 8.26 am in New York. The stocks skyrocketed in late January as day traders that populate Reddit’s WallStreetBets forum sought to fend off short-sellers.
Robinhood’s temporary restrictions on the Reddit group’s favourite stocks last week triggered an outcry among retail traders who said the brokerage had sided with hedge funds and institutional money. In order to shore up its capital amid the trading frenzy, the trading app operator has had to borrow or raise billions of dollars.
Trading in other Reddit-favored names were mixed before Friday’s stock-market open with cannabis company Sundial Growers Inc. and Naked Brand Group Ltd. each rising 1.7%. Koss Corp., Express Inc., and Ezgo Technologies were among other “meme stocks” that gained in early trading. Zomedica Corp. fell 7%.
