By Wallace Witkowski
Shares of videogame retailer GameStop Corp. /zigman2/quotes/203755179/composite GME -1.12% and theater chain AMC Entertainment Holdings Inc. bounced back in premarket trading Friday, after at least one popular trading app said it would drop restrictions on trading.
GameStop /zigman2/quotes/203755179/composite GME -1.12% shares rose 74% ahead of Friday’s open, following an announcement from online trading platform Robinhood that it would “allow limited buys” of GameStop and other volatile stocks beginning Friday. Robinhood restricted trading Thursday of GameStop and others caught up in a wave of buying spurred by a Reddit message board, attracting a wave of criticism and a lawsuit from users .
Robinhood was not alone. Interactive Brokers Group Inc. /zigman2/quotes/208880397/composite IBKR -0.14% said it would allow investors to unwind positions of volatile stocks like GameStop but not create new ones, and Citibank /zigman2/quotes/207741460/composite C -0.12% and Wells Fargo /zigman2/quotes/203790192/composite WFC +3.79% have told advisers not to suggest the stocks to clients, according to The Wall Street Journal . TD Ameritrade and Schwab restricted trades on GameStop and AMC trading on Wednesday.
After the Securities and Exchange Commission publicly took notice of the trading Wednesday , both chambers of Congress scheduled hearings on GameStop and related trading Thursday. The New York attorney general also weighed in Thursday afternoon.
GameStop, which had gained as much as 39% in early trading on Thursday to touch an intraday high of $483, finished the regular trading day down 44% at $193.60. More than 54 million shares of GameStop had traded by the close despite the shutdown of trading on some platforms, compared with an average daily volume of 10.6 million over the past 52 weeks. Thursday’s drop snapped a five-session winning streak in which the shares soared 788%, and some investors saw Wednesday’s high as a good time for taking profit.
Similarly, AMC /zigman2/quotes/200235402/composite AMC -5.76% shares rallied 50% in Friday’s premarket session, following a 57% drop on Thursday to close at $8.63. Volume was even more incredible, with more than 313 million shares trading by the close, compared with a 52-week daily average of 23.9 million.
Trading of both stocks were halted several times on the New York Stock Exchange in Thursday’s session due to volatility.
On Wednesday, GameStop closed at a record high $347.51 following a 135% surge, while AMC shares quadrupled in price as buying by individual investors clashed with Wall Street firms holding short positions.