AMC’s Stock Plummets 61% as Robinhood, TD Ameritrade Restrict Trading

Popular trading app said it was restricting AMC and GameStop trading based on “recent volatility,” infuriating many users and shareholders

Last Updated: January 28, 2021 @ 8:23 AM

AMC’s wild week continued on Thursday morning, with the nation’s largest cinema chain dropping 61% an hour into trading. The drop comes after AMC’s share price rocketed higher a day earlier, moving from about $5 per share to nearly $20, and also after Robinhood and TD Ameritrade, the popular trading platforms, restricted users’ ability to trade the company and GameStop, another company that’s seen its share price zoom higher in the last week, on Thursday.

The Thursday morning decline for AMC pushed shares from $19.90 at the end of Wednesday trading to $7.74 per share soon after the market opened on Thursday. AMC’s rebound was likely curbed by Robinood’s and TD Ameritrade’s decisions on Thursday to block users from buying new shares of AMC, GameStop and other companies that have been pushed higher thanks in large part to the Wall Street Bets forum on Reddit, which has been championing the stock in recent days.

“We continuously monitor the markets and make changes where necessary,” Robinhood said in a statement on its website. “In light of recent volatility, we are restricting transactions for certain securities to position closing only.”

Robinhood also raised its margin requirements to trade the companies, forcing investors to put down more collateral, and blocked users from making certain options trades.

The app’s decision infuriated many users, with many taking to Twitter and Reddit to rip Robinhood. Here’s a taste of their complaints, including Ja Rule blasting Robinhood’s “f—— crime.” California congressman Ted Lieu weighed in and sought an explanation from the investing app.

AMC caught the eye of many Wall Street Bets-inspired investors earlier this week when the company raised $917 million, helping it avoid bankruptcy. Soon after, retail investors piled into AMC and were using the #SaveAMC hashtag as a rallying cry to keep the company’s shares pushing higher.

GameStop, meanwhile, which has seen its share price run from about $40 per share last week to north of $340 on Wednesday, was down about 24% in early trading to $264 per share.