The controversial American brokerage company Robinhood has lifted the ban on trading in GameStop and AMC Entertainment shares, which was imposed at the end of January amid high volatility in securities. This is stated in a message posted on the company’s website.
Users of Robinhood, one of the world’s most popular exchange trading services actively used by investors on Reddit, can now buy securities without restrictions. Previously, only 20 GameStop shares could be bought through Robinhood, but soon the limit was raised to 100 shares.
The relaxation of restrictions came after the massive activity of private investors, which sharply raised the shares of GameStop, AMC and other companies, began to decline. If at the end of January one GameStop share cost $ 483, then in the first week of February the price fell by 84 percent.
At the end of November, a member of the community of private traders WallStreetBets on Reddit wrote a post in which he announced that Wall Street is confident that the GameStop video game store chain is dying. As a result, millions of private investors-individuals began to buy securities, as a result, within a few days, they jumped in price from 10 to 400 dollars. And a number of funds were forced to close their short positions (“shorts”) with billions of dollars in losses.
Senvest Management LLC, a hedge fund, managed to make money on the riot of private investors. The founders of the fund – Richard Mashaal and Brian Gonik – began buying up GameStop shares in the fall of last year, contrary to the advice of most analysts, by the end of October their share in the company had reached 5 percent. Against the background of the growth of securities, they raised about $ 700 million.