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GameStop shares tanked again Thursday as the Reddit-fueled trade unraveled further.
The stock traded lower by more than 42%, bringing the video-game retailer’s losses for the week to more than 83%.
The latest price drop came even after trading app Robinhood rolled back some of its trading limits on the stock.
GameStop experienced a meteoric rise last week in a major short squeeze orchestrated by Reddit users. Point-and-click investors piled into the name, driving its share price up 400%, while hedge funds rushed to cover their losses from shorting the stock.
Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations the market value will fall below that level when it’s time to buy back the borrowed shares they have sold.
Millennial-favored trading app Robinhood, which started restricting trading of a handful of stocks last week amid an increase in capital requirements from the Depository Trust & Clearing Corporation, now allows clients to purchase up to 500 shares of GameStop. Earlier this week, clients could only buy one share of the company.
However, investors who own more than 500 shares can’t buy additional shares.
The only other stock Robinhood is still restricting is AMC Entertainment. Customers can’t buy any shares of the movie-theater operator if they own 5,500 shares.
Regulators in Washington are looking into the GameStop trading mania. Treasury Secretary Janet Yellen said Tuesday she will meet with the heads of the Securities and Exchange Commission, the Commodities Futures Trading Commission and Federal Reserve officials to discuss “whether recent activities are consistent with investor protection and fair and efficient markets.”
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