Gamestop (GME) Stock News: GME share price consolidates after huge volatility, what's next?

Update

Further to the prior news, (below) Gamestop (GME) shares have given back almost all of the prior day's territory.

The share price dropped from $483 to $112.25 on the day and is now steady at $230 consolidating the huge volatility of the past 24-hours.

Unsurprisingly, Robinhood bans on GME stock have stirred up quite a fuss and the hedge funds enduring the malice are in a cash crunch.

For example, Melvin Capital has allegedly closed out its short position at a great loss. moreover, other hedge funds could need rescue financing due to the inspired rallies in other old-school names like AMC Entertainment (NYSE:AMC) and BlackBerry (NYSE:BB). 

For better or for worse, as this all unfolds, regulators, politicians and celebrities are chiming in, leading to unprecedented measures being taken to prevent destructive bets being placed on several other stocks which are now too risky and too high-flying to trade, at least according to Robinhood.

That list includes Reddit stocks:

• AMC Entertainment (NYSE:AMC)
• BlackBerry (NYSE:BB)
• Bed, Bath & Beyond (NASDAQ:BBBY)
• Express (NYSE:EXPR)
• Koss (NASDAQ:KOSS)
• Naked Brand (NASDAQ:NAKD)
• Nokia (NYSE:NOK)

So what next? Regardless of Robinhood's too little too late response, a class-action lawsuit against the outfit could well be on the way.

Gamestop (GME) shares continued moving higher in early trading on Thursday, with GME having broken through $500 in early pre-market trading.

See also Gamestop (GME) Stock Price and Forecast: Are shares going to break $500 today? 

Multiple brokers put restrictions on trading in Gamestop (GME) and related shares on Thursday as the furore over the wallstreetbets phenomenon continued.

Robinhood reportedly put up the following “we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.”

Interactive brokers meanwhile tweeted:

Gamestop (GME) appeared to suffer on the back of these restrictions, with GME shares falling sharply from above $500 to below $300 before the market opened. However normal service was resumed once the regular session began and currently GME is back above $400, having been halted to the upside numerous times.

See also: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial

Wallstreetbets forum on Reddit continues to discuss GME and to add members now accounting over 4 million members and many other readers. 

Short interest still high

S3 partners pointed out that the short interest in Gamestop remains stubbornly high and still above 100%. The initial reasoning behind the move, the short squeeze, remains in place.

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