Following a historic economic boom, popular broker TD Ameritrade has restricted trading on GameStop stocks. This comes at the height of a short-squeeze scheme on GameStop and several other companies like AMC Theaters that has resulted in total chaos on the stock market, turning cheap stocks into riches.
A coordinated effort from the infamous /r/WallStreetBets helped turn the GameStop stock into a millionaire machine. After the stock for the dwindling retailer was put on the map by Michael Burry (who was played by Christian Bale in 2015's The Big Short), people saw an opportunity for easy wealth. At the end of 2020, the stock prices for GameStop were about $20 a share. Less than a month later, they've grown to over $300 with many dubbing this as a "once in a lifetime opportunity" with the help of people like Elon Musk.
Needless to say, this sudden increase in interest and money has caused a lot of concern. Many are saying this will lead to increased regulation and, potentially, major issues for those currently invested in GameStop. TD Ameritrade's restrictions are likely the first in a long line of headaches to come going forward, especially as other companies get shorted. "We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors," the company said in a statement (via Protocol). Ameritrade did not state what restrictions they've implemented thus far. State regulators are also suggesting they want to lock trading on GameStop for 30 days with the Biden administration monitoring the situation.
At the start of the day, brokers like Robinhood were halting trading periodically to avoid panic selling. As news spread around about this wealth redistribution, many of these brokers were crashing and facing down time which led to a rollercoaster at the market. Many also ran into issues with signing up on various broker apps in the morning.
GameStop has not said a single word on this whole ordeal, which could damage the company. The games retailer has been struggling over the last few years. In 2020, they revealed they closed over 800 GameStop stores and depending on how this short-squeeze goes, it could further their financial rut.
As Reddit continues to pump the stocks, users have reported gains as high as $11 million and others gaining thousands with ease. /r/WallStreetBets is hoping the stock will hit $500 by the end of the week with more bullish investors saying it could hit $1,000 as early as next week.
Sources: Joseph Charles (via Protocol)