What happened
Actions of GameStop (NYSE: GME) recovered on Friday after a sharp drop in the video game retailer’s stock price from recent highs last week. At the close of the trading session, GameStop’s share price rose 19.2%, after rising to 77.6% earlier in the day.
And
After an epic squeeze in the stock purchase caused GameStop’s stock price to rise to $ 483 on Jan. 28 – above $ 18.84 on Dec. 31 – the stock began to fall. The trade restrictions imposed by Robinhood and other brokers that limited how many GameStop shares they could buy have undoubtedly contributed to the decline.
GameStop’s stock recovered some of its recent losses on Friday. Image source: Getty Images.
After suffering a reaction from his clients and facing strong criticism from prominent lawmakers – some of whom demanded an investigation into his decision to limit the GameStop trade and other actions – Robinhood raised his trade limits on GameStop on Friday. With their ability to buy shares restored, many GameStop bulls took the opportunity to acquire more shares.
What now
Although GameStop’s stock price rebounded today, the video game retailer remains a high-risk investment. Digital game downloads pose a serious threat to GameStop’s retail store chain and are likely to put pressure on its sales and profits in the coming years.