GameStop Corp on Thursday plummeted, snapping a dizzying six-day rally and wiping out nearly US$11 billion in market value after brokers choked off demand for the stock by curbing trading on the apps used by the firm’s zealous fan base.
On Thursday, the stock plunged 44 percent after Robinhood Markets, Interactive Brokers Group Inc and others took steps to curtail activity in several high-flying stocks, including GameStop and AMC Entertainment Holdings Inc.
E*Trade Financial Corp is preventing customers from purchasing shares of both firms, a person familiar with the matter said.
Photo:Reuters
GameStop shares on Thursday jumped during extended trading, after Robinhood said that it would allow limited buying of certain securities yesterday.
“We’re beginning to open up trading for some of these securities in a responsible manner,” the firm said in a statement.
GameStop rose 46 percent in post-market trading, while AMC climbed 29 percent.
The video game retailer triggered 19 volatility halts on its way to shedding more than twice what it was worth on Monday.
Volume also fell, with about 55 million shares traded by Thursday afternoon, a far cry from its record of 197 million on Friday last week.
The trading curbs resulted in howls of outrage on Reddit’s WallStreetBets forum, which has been the launching point for many of this week’s blistering rallies.
Robinhood has been hit by lawsuits from customers.
It also prompted lawmakers to criticize restrictions imposed on retail investors.
US Senator Sherrod Brown, incoming chairman of the US Senate Banking Committee, said that he plans to hold a hearing on the “current state of the stock market.”
The clampdown by brokerages extended beyond GameStop to other popular stocks, such as BlackBerry Ltd, that have surged this week, burning short sellers and hedge funds.
The phenomenon attracted the attention of regulators on Wednesday, with the US Securities and Exchange Commission saying that it was monitoring the situation.
“The inability to trade depressed the volume, and high volume is what kept the stock trading at a high level,” Wedbush Securities Inc analyst Michael Pachter said. “I’m actually surprised the trading platforms think they can manage the market this way, and expect they will reverse their decision shortly.”
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
UNPRECEDENTED DEAL: The arrangement which also includes AMD risks invalidating the national security rationale for US export controls, an expert said Nvidia Corp and Advanced Micro Devices Inc (AMD) have agreed to pay 15 percent of their revenue from Chinese artificial intelligence (AI) chip sales to the US government in a deal to secure export licenses, an unusual arrangement that might unnerve both US companies and Beijing. Nvidia plans to share 15 percent of the revenue from sales of its H20 AI accelerator in China, a person familiar with the matter said. AMD is to deliver the same share from MI308 revenue, the person added, asking for anonymity to discuss internal deliberations. The arrangement reflects US President Donald Trump’s consistent effort to engineer
RSS