Shares of GamesStop ,AMC Entertainment , Bed Bath and Beyond and other heavily shorted stocks surged in after-hours trading Thursday as the CEO of online brokerage Robinhood said restrictions on buying the stocks could be lifted Friday.
GameStop shares rose $136.95, or 70%, to $329.95 in after-hours trading.
Robinhood Co-Founder and CEO Vlad Tenev told Bloomberg TV that the platform halted purchases of 13 stocks Thursday “to protect the firm and our customers.” Tenev said the company faced enormous requirements to deposit cash with clearinghouses to cover the settlements “around stocks that are very popular on social media.”
He added that “We hope to re-enable buying as soon as tomorrow morning.”
The WallStreetBets subreddit, an online community, has seen signups soar into the millions in recent days amid the enormous gains in short-squeeze targets touted in the group. GameStop, for example, traded under $20 less than three weeks ago.
In the regular session Thursday, GameStop swung wildly between a low of $112.25 and a high of $482.85 before eventually ending the regular session down $153.91, or 44%, at $193.60 as limits on purchases at Robinhood and other online brokerages took effect.
The frenzy in GameStop and other heavily shorted stocks has quickly become a cultural phenomenon seen by many as a demonstration of small investors fighting back against the Wall Street Goliath. Politicians have been quick to jump into the fray, with at least one Senate hearing in the works.
Former Labor Secretary Robert Reich tweeted, “When hedge fund billionaires move markets, they get huge bonuses. When ordinary Americans move market, they get shut down by Wall Street. The system is rigged.”
The White House referred questions on the situation Thursday to the Securities and Exchange Commission, which put out a statement Wednesday saying it is monitoring the unusual market activity.
In addition to GameStop, shares of AMC Entertainment were active in after-hours trading, gaining $3.37, or 39%, to $12. Bed Bath & Beyond shares rose $3.57, or 11%, to $37.21 in after-hours action.