Robinhood blocks new purchases of GameStop stock and
will not renew the buying option anymore
Robinhood, the online trading application, is preventing users from making new purchases of several stocks, including GameStop Corp. GME, -31.55%, which have surged in value in recent weeks even as professional investors continue to hold large short positions in those securities, the company said in a blog post Thursday.
“We continuously monitor the markets and make changes where necessary,” the statement reads. “In light of recent volatility, we are restricting transactions for certain securities to position closing only.”
In addition to GameStop, the new policy affects shares of BlackBerry Ltd. BB, -39.00%, AMC Entertainment Holdings Inc. AMC, -54.57%, Bed Bath & Beyond Inc. BBBY, -31.40%, Express Inc. EXPR, -50.37%, Koss Corp. KOSS, +11.72%, Naked Brand Group Ltd. NAKD, +38.77%, and American Depository Receipts for Nokia Corp. NOK, -26.59%.
Shares in these companies have surged between 26% and 3,087% during January, according to FactSet, with the action appearing to be catalyzed by social media campaigns aimed at boosting their prices and harming professional investors who have sold them short.
Robinhood did not respond to a request to comment.