What happened last week? GameStop stock soared, Robinhood halted trading, and the SEC said it would monitor the situation.
Advertisement
Kevin Shalvey
Jan 31, 2021, 22:18 IST
Wall Street Bets users have driven up the GameStop stock priceREUTERS/Dado Ruvic/Illustration/File Photo
What happened last week? GameStop stock surged on Monday.
Robinhood temporarily paused trading of GameStop and other stocks.
The SEC on Friday said it was "closely monitoring" the situation.
Advertisement
What happened last week? An army of retail traders, led by Reddit's Wall Street Bets forum, poured money into shares of GameStop, a dying retail relic, as part of a battle against Wall Street short sellers.
Some on Reddit said the stock rally was payback for the 2008 financial collapse. GameStop, which had nearly died in 2019, ended the trading week with a market cap of about $22.67 billion, according to Yahoo Finance.
Complimentary Tech Event
Transform talent with learning that works
Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More
The company said in a Friday blog post that its deposit requirements increased so rapidly that it had to block purchases to "comfortably" meet SEC regulations.
In the UK, meanwhile, the World Wide Robin Hood Society's Twitter following grew about 100-fold in a day, as users seemed to mistake it for the Robinhood app.
The SEC said it was "closely monitoring" the situation
After Senator Elizabeth Warrensent a letter to the Securities and Exchange Commission on Friday, the regulator said it would keep an eye on the situation.
In a statement, the agency said: "The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks' trading prices over the past several days. Our core market infrastructure has proven resilient under the weight of this week's extraordinary trading volumes."
Advertisement
It added: "Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence."
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.