Culture

Reddit's AMC and GameStop stocks swing wildly after Robinhood, TD Ameritrade restrict trades

Companies that Wall Street bet heavily against are experiencing unprecedented stock market movements.

Ian Sherr Contributor and Former Editor at Large / News

Ian Sherr (he/him/his) grew up in the San Francisco Bay Area, so he's always had a connection to the tech world. As an editor at large at CNET, he wrote about Apple, Microsoft, VR, video games and internet troubles. Aside from writing, he tinkers with tech at home, is a longtime fencer -- the kind with swords -- and began woodworking during the pandemic.

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Ian Sherr

Jan. 28, 2021 9:58 a.m. PT

2 min read

money-dollar-fire-burning — Some Reddit investors are seeing their millions go up in smoke.
CNET

GameStop and AMC stocks at the center of a multibillion dollar drama between Wall Street investors and social media traders on Reddit have dropped dramatically Thursday. GameStop shares jumped to a high of $483 per share early in the day, then dropped to around $246 by midday ET, only to rally minutes later to more than $300. AMC, similarly, had gone as high as $16.50 per share before dropping to about $8 and then inching up to $9.50.

The moves came after popular stock trading apps such as Robinhood and TD Ameritrade announced they would restrict trades of stocks being heavily bet on, including GameStop and AMC. The New York Stock Exchange as well has stepped in amid the frenzy, temporarily halting AMC trading at least 10 times since the market opened at 9:30 a.m. ET, and GameStop shares at least a dozen times.

Watch this: What does GameStop's skyrocketing stock have to do with a subreddit?

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The moves mark the spectacle of what some investors call a war between Wall Street and social media traders. The Reddit community r/WallStreetBets has become a central hub of a financial push to hurt Wall Street investors who bet big against GameStop's future. As the social media investors pushed shares of the company up, Wall Street has had to recalibrate its bets, pushing shares beyond their all-time highs.

Reddit users have expressed furor at Robinhood and TD Ameritrade for restricting trades, with threats of lawsuits already spreading around social media.

Meanwhile, social media traders are encouraging fans to "hold the line," as they call it, and not sell off their shares. That may've helped the share prices creep back up after their dramatic drops.