GameStop Saga Continues: Robinhood Restricts Buys Amid Roaring Kitty’s New Bet

The trading platform Robinhood has once again found itself at the center of controversy as it imposes buying restrictions on GameStop shares. This move comes in the wake of the infamous internet personality Roaring Kitty revealing a massive $175 million bet on the company.

The Catalyst Behind the Chaos

Late Sunday, Robinhood made the decision to limit purchases of GameStop shares following a significant surge in the stock’s value. The restrictions were set to allow orders only within 20% above or below a reference price of $22.99 during overnight trading hours. This decision has sparked a fresh wave of discussions and debates across financial forums and social media platforms.

The sudden restriction was a response to a Reddit post by Keith Gill, better known as Roaring Kitty, who disclosed a substantial investment in GameStop. The post included a screenshot indicating the purchase of 5 million GME shares and a significant allocation towards call options, betting on the stock reaching at least $20 per share by June 21.

Market Turbulence and User Reaction

Robinhood’s actions have led to a mixed reaction among its user base. Some traders reported being completely blocked from buying GME shares overnight, leading to frustration and accusations of market manipulation. The platform’s history with GameStop has been fraught with tension, especially following the events of the 2021 short squeeze that brought the brokerage under intense scrutiny.

The market reacted quickly to Gill’s disclosure, with GameStop’s stock price experiencing a nearly 20% increase in just 20 minutes of overnight trading. This dramatic rise is reminiscent of the volatility seen during the initial GameStop frenzy, which was largely fueled by retail investors coordinating through social media.

Implications for the Future of Trading

The latest developments raise questions about the future of retail trading and the role of platforms like Robinhood in shaping market dynamics. The brokerage’s decision to limit trades highlights the delicate balance between protecting investors and ensuring a free and fair market. As the dust settles, the financial community will be watching closely to see how Robinhood navigates these complex issues and what it means for the future of meme stocks like GameStop.