GameStop shares spiked nearly 65% Friday, driving another tumultuous day on Wall Street in a week marked by a captivating drama about money, power and a tech-fueled rebellion.

The surge came after Robinhood announced that it would allow “limited buys” of GameStop and other heavily shorted stocks to resume on Friday amid reports that the popular trading app had raised $1 billion overnight from investors to comply with federally mandated capital requirements.

Shares were trading at $325 at the market close after nearly breaching $414 earlier in the session. The video game retailer’s stock sold for roughly $17 at the beginning of the year.

GameStop’s sharp rise Friday ran counter to the broader market, as pessimism tied to dismal economic data and anxiety over the trading chaos took hold. The Dow Jones industrial average gave up nearly 621 points, or roughly 2% on the day. The S&P 500 fell 73 points or 1.9%, while the Nasdaq shed 266 points, or 2%.

Robinhood shocked investors Thursday morning when it abruptly restricted purchases of GameStop, AMC Entertainment, BlackBerry and certain other volatile stocks. The equities have drawn intense interest from regular investors on the Reddit forum r/WallStreetBets and other online trading communities, driving share prices to astronomical heights and alarming regulators and brokerage firms.

As of Friday afternoon, Robinhood customers who already hold GameStop were restricted from buying additional shares, according to a table on the company’s investing webpage that lists the purchase limits on the affected stocks. Customers who do not already own GameStop are limited to purchasing a single share.


Other trading platforms, including Interactive Brokers and E-Trade, similarly blocked their customers from buying GameStop and the other “meme stocks” on Thursday. But Robinhood, owing to its popularity, its namesake and its branding as a democratizing force in the world of high finance, drew the ire of customers and public officials for shutting its customers out in the middle of the trading frenzy.

The company faces at least one lawsuit seeking class-action status, alleging that Robinhood intentionally restricted trading to deprive investors of gains and manipulate the market.

And Texas Attorney General Ken Paxton, R, announced in a tweet he is launching an investigation into the company, in addition to the chat platform Discord and hedge funds he said “rigged” the market “for the benefit of Wall St elites.” Paxton himself is awaiting trial on felony securities fraud charges stemming from allegations he defrauded investors in a tech startup.

GameStop shares plummeted Thursday, shedding more than 60% at the closing bell. AMC shares followed suit, losing 56% of its value. AMC has not fully recovered but bounced back nearly 54% Friday.

In a blog post Thursday afternoon, Robinhood said its decision to limit buying was necessary to conform with financial regulations, “including SEC net capital obligations and clearinghouse deposits,” which can heighten in times of substantial volatility. “These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today,” the company said.

Robinhood raised $1 billion from existing investors, the New York Times reported, and tapped a $500 million credit line to meet its capital requirements.


But Robinhood’s explanation for the restrictions did little to appease critics. In a live stream on Twitch Thursday night, Rep. Alexandria Ocasio-Cortez, D-N.Y., questioned Robinhood’s move in a wide-ranging discussion about the power dynamics between Wall Street and the public.

“We didn’t see anyone go to jail for that,” Ocasio-Cortez said of Wall Street during the mortgage crisis. “We didn’t see virtually anybody held accountable in any serious way.” The appearance of a populist revolt with GameStop felt like the first time anyone was held to account, she said.

Leaders from both parties in the House and Senate who lead committees that oversee the financial services industry have vowed to hold hearings on the volatile trading. Among the lines of questioning will be the financial role of free trading platforms like Robinhood and the actions of hedge funds whose short selling is at the center of the market volatility.

Sen. Elizabeth Warren, D-Mass., in a letter to Securities and Exchange Commission Acting Chair Allison Lee, asked how the agency will root out potential manipulation behind the market swings, prevent it in the future, and assess any systemic risk the volatility presents.

In a statement Friday, the SEC’s leaders said the agency “will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.” The SEC vowed to protect retail investors from abusive and manipulative trading activity that runs afoul of the law.

Cryptocurrencies also got a lift in the trading whirlwind. Elon Musk, the chief executive of SpaceX and Tesla, changed his Twitter bio to read: #bitcoin. Musk’s electric car company has been a long-standing target of short sellers, and he is openly critical of them. Earlier this week, he directed his 44 million followers to the WallStreetBets forum, tweeting a link and an invitation of sorts: “Gamestonk!!”


On Friday, bitcoin swelled by 10%. Dogecoin, a meme-turned cryptocurrency, has risen more than 100%.

Public figures outside of the business world have also taken up the retail investors’ cause, framing their efforts as an underdog’s score-settling.

“The Redditors aren’t cheating, they’re joining a party Wall Street insiders have been enjoying for years. Don’t shut them down . . . maybe sue them for copyright infringement instead!!” said former “Daily Show” host Jon Stewart, in the first post off his new Twitter account.

On Thursday, new data from the Labor Department signaled a flagging economic recovery, marked by nearly 10 million lost jobs and almost 24 million adults who are struggling to provide food for their families. Officials said the nation’s economy shrank by 3.5% last year, as the coronavirus brutalized businesses and households, a slowdown not seen since 1946, when the government scaled back wartime spending.