Robinhood’s plan to resume “limited buys” of GameStop on Friday has become another gut punch for investors in the meme stock craze. That’s because the company is only permitting new users to buy a single share of Gamestop and 35 other stocks.
In total, the company's buy limits cover 51 different stocks. Other companies capped to one share buys include American Airlines, AMC, and BlackBerry, which the Reddit forum r/wallstreetbets has been encouraging users to invest in.
“Please note that these are aggregate limits for each security and not per-order limits, and include shares and options contracts that you already hold,” Robinhood added.
In other words, existing holders of the affected stocks won’t be able to buy any new shares through the Robinhood app. Meanwhile, the buy limits for the remaining companies, such as Nokia and Express, have been capped to five shares.
In some cases though, Robinhood is permitting users to purchase options in the stocks.
The restriction is puzzling given the company initially blocked buys for eight stocks—not 51. Notable companies added to the list include vaccine developer Moderna, chipmaker AMD, coffeehouse chain Starbucks, and satellite radio company Sirius XM.
We’ve reached out to Robinhood, and we’ll update the story if we hear back. However, The Wall Street Journal is reporting Robinhood has been running out of cash to cover the flood of transactions over the platform. As a result, it had to immediately raise an additional $1 billion from financial lenders to keep operating.
Still, the buy limits will likely push users to try other stock trading platforms as investors in the meme stock craze try to rebuild momentum. On Friday, GameStop’s share price rallied from $197 to $325 before the market closed.