Tech

Anger as trading in GameStop shares is restricted

GameStop

Amateur investors are responding with outrage after trading platforms curbed buying of shares in the US games firm GameStop and other companies.

The moves by Robinhood and Interactive Brokers follow days of frenzied trading that led to massive gains for some stocks.

Shares in GameStop dived by as much as 55% after the restrictions.

It is the latest twist in a battle that has pitted amateur investors against Wall Street giants.

Major hedge funds had bet billions of dollars that GameStop’s shares would fall.

But they have faced major losses after amateurs, swapping tips on social media sites such as Reddit, drove up the share price by more than 700% in a week.

Other firms, such as AMC Entertainment, Koss Corp and BlackBerry, also saw sharp gains. They were embraced by day traders after hedge funds bet against them.

The activity has drawn questions from regulators, who are monitoring trading amid fears of illegal actions.

However, the amateur investors say they are just playing Wall Street at its own game.

In online forums they discussed legal action and accused Robinhood and other brokerages enacting their own form of market manipulation by restricting purchases of certain shares.

Robinhood co-founder Vladimir Tenev tweeted that the firm had taken its decision based on regulatory requirements, and said limited buys of the restricted stocks would be allowed from Friday.