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.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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