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GameStop & AMC shares plummet after Robinhood & WeBull BLOCK ‘Reddit rally’ as politicians slam move to help Wall Street
GAMESTOP and AMC shares plummeted on Thursday after Robinhood and WeBull blocked "Reddit rally" as politicians slammed the move to help Wall Street.
On Thursday morning, GameStop shares fell by more than 50 percent.
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GameStop stock prices sunk to $126.01 by 11.20am on Thursday - which is drastically different than Wednesday morning, where the share price was $469.42.
At around 11.25am the stock price for AMC Entertainment Holdings Inc dropped to $6.52 - which is $9.77 less than yesterday morning.
News of the plummeting stocks came after the early on Thursday.
- a popular app among amateur stock traders which was founded by Baiju Bhatt and Vlad Tenev - offers trading tools, stock tips and even a cryptocurrency exchange where users can invest in Bitcoin.
WeBull, a financial services company, also took matters into their own hands and blocked clients from opening new positions in AMC, GME, and KOSS stocks.
However, as of 2.35pm on Thursday, , announcing: "GME, AMC, and KOSS are no longer restricted."
Several Robinhood users reported problems with the platform after the investment company clamped down on the stocks claiming they were too volatile following huge price swings pushed by a Reddit group.
What is Robinhood and how can I buy stock through the app?
Platforms like Robinhood claim to make investing so simple that anyone can give it a go – though they come with their own risks.
Robinhood is an app popular among amateur stock traders, with hundreds of thousands of downloads across Apple and Google's app stores.
The platform, which also has a website, offers trading tools, stock tips and even a cryptocurrency exchange where users can invest in Bitcoin.
Robinhood was founded by Baiju Bhatt and Vlad Tenev, two children of immigrants who met at Stanford University in 2005.
They were inspired by the Occupy Wall Street protests to create an app that made the stock market more accessible.
The issues were reported just minutes after Robinhood removed .
Meanwhile, a Robinhood customer has the trading app over the company's removal of GameStop.
In response to Robinhood preventing users from trading GameStop stocks, Donald Trump Jr : "Yea I don’t recall the part of the story when Robin Hood sells out and starts to be a mercenary for the crown...
"Apparently everyone has a price," he wrote, followed by ";#ToTheMoon," "#GameStop" and rocket ship emojis.
Alexandria Ocasio-Cortez also took to : "This is unacceptable.
"We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
"As a member of the Financial Services Cmte, I’d support a hearing if necessary."
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She then followed up with a jab at Republicans, saying: "I am happy to work with Republicans on this issue where there’s common ground, but you almost had me murdered 3 weeks ago so you can sit this one out.
"Happy to work w/ almost any other GOP that aren’t trying to get me killed.
"In the meantime if you want to help, you can resign."
In response, Ted Cruz replied: "Fully agree," alongside Elon Musk who wrote: "Absolutely."
According to the , a class-action lawsuit was filed against the Robinhood app on Thursday.
Brendon Nelson, a Massachusetts resident filed the federal suit representing anyone affected by the app's changes.
"On or about January 27, 2021 Robinhood, in order to slow the growth of GME deprived their customers of the ability to use their service, abruptly, purposefully, willfully, and knowingly pulled GME from their app," the suit reportedly states.
"Meaning, retail investors could no longer buy or even search for GME on Robinhood’s app."
Meanwhile, today after Reddit traders bought up stocks driving up the share prices.
It comes after yesterday when the amateur traders sent shares for the retailer GameStop skyrocketing in a move that left major hedge funds reeling from billions of dollars in losses.
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The changes come after Reddit users managed to send shares for retailer GameStop skyrocketing this week - in a move that left major hedge funds reeling from billions of dollars in losses.
Users in a group called WallStreetBets came together to send GameStop's shares up a shocking 130 percent on Wednesday.
The struggling store's shares are up a total of 1,700 percent since the beginning of January, from $17.25 per share to $347.51 on Wednesday.
The Wall Street trolls, apparently led by finance expert "Roaring Kitty," are driving up share prices by betting against Wall Street short-sellers.
Short-sellers, despised by many, are big hedge funds that bet on a decline by selling borrowed shares in the hope of repaying at a lower price.
WallStreetBets is a group with several million members who share trading tips about how to beat "the system," and users have been on a GameStop buying spree.
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The influx in purchases has been putting pressure on short sellers to make purchases to avoid steeper losses.
GameStop's three largest investors have made $3billion since the stock prices began climbing, .
WallStreetBet's followers have caused such a massive disruption to the stock market that they have attracted the attention of authorities, and even the White House.
";Our economic team, including (Treasury) Secretary (Janet) Yellen and others are monitoring the situation," White House Spokeswoman Jen Psaki said on Wednesday.
"It's a good reminder, though, that the stock market isn't the only measure of the health of our economy," she added.
The move didn't go unnoticed by other investors, with former Trump official Anthony Scaramucci tweeting: "We are witnessing the French Revolution of Finance."
The Securities and Exchange Commission also confirmed on Wednesday that it was monitoring the activity.
A number of big-time hedge funds who shorted GameStop stock speculating that share prices would fall are now dealing with massive losses.
Citron and Melvin Capitol said on Wednesday that they had closed out their short positions after suffering undisclosed losses. Experts speculate those could be in the billions.
GameStop isn't the only company being targeted by the Wall Street trollers.
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Stock skyrocketed for other companies that had been heavily shorted by Wall Street firms as well.
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AMC Entertainment's shares jumped a whopping 300 percent on Wednesday, and BlackBerry's were up 33 percent.
Wall Street experts warn, however, that the skyrocketing stock prices will not likely last long, as they do not reflect the health of the businesses.
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