According to a number of users of the Twitter social network, the eToro platform has also suspended trading in GME and AMC shares, and the largest bank in the USA, Bank of America, has also decided to put a stop on trades on its Merrill Edge platform. Revolut also temporarily suspended GME trades on Wednesday.
In response to the trading stopwatch, GME shares fell from a peak of $ 492 to $ 234. In the post-trade phase, they reached the $ 191 mark and closed the day with a loss of more than 40 percent. At the same time, AMC and GameStop shares in particular have experienced unprecedented growth in recent days, reaching hundreds of percent.
On Thursday, a number of users of the Revolut platform, including the Czech Republic, also reported problems with trading in the above-mentioned titles. The platform did not carry out a number of ordered transactions even after the ban was lifted, and it blocked users’ funds (E15.cz addressed the users themselves with these problems). There were also a number of complaints on Twitter to users to whom the Robinhood platform sold without their permission a purchase position on GME shares, which they held so-called leverage (ie they had borrowed for them). However, their authenticity is still impossible to verify due to the rapid development of market events.
One of the richest men on the planet – Elon Musk – also commented on the case. In his tweet, he moralizes that “You can’t sell a house you don’t own, you can’t sell a car you don’t own, but you can sell a stock you don’t own! Shorting is a relic and a legal fraud. ”This seems to be against the practice of large funds, whose business is in a shortening position.
u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons— Elon Musk (@elonmusk) January 28, 2021
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Behind the massive share purchases is a group of small investors who call themselves WallStreetBets and communicate via the Reddit social network. The group claims to have gone into battle with wealthy Wall Street executives (and hedge funds) and that their goal is to redistribute assets around the world. The White House, headed by President Joe Biden’s new administration, also began to address the situation.
The WallStreetBets channel on Reddit is currently closed as private. Another grouping communication platform on the Discord server was closed yesterday, according to Discord operators due to “hate contributions”, but not due to suspicions of financial fraud. This is often mentioned as the main offense of the group. However, future courts will probably have to decide.
One of the biggest losers, however, is the hedge fund Melvin Capital, which, according to CNBC, was forced by WallStreetBets to withdraw from the entire GME shortening position, apparently realizing a loss of more than a third of its value at the beginning of this year – 12.5 billion dollars. The total volume of short-lived losses on GME shares was more than five billion dollars on Thursday evening, according to the Investopedia server.
The Financial Times quoted a number of angry users as saying that the aforementioned retail trading platforms had been pushed by hedge funds to stop trading stocks. However, the factualness of these claims cannot be verified, but according to their tweets, the same opinion is held, for example, by US Republican Senator Ted Cruz or Democratic Congresswoman Alexandria Ocasio-Cortez. The RobinHood platform declined to comment on their proclamations.
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