Trading app Robinhood late on Friday restricted purchases of 50 different stocks
List included meme stock GameStop but also General Motors and Starbucks
It followed a wild week of trading fueled by anti-hedge fund Reddit insurgency
It became clear that Robinhood was under severe strain with its cash reserves
Company is required to place deposits with clearing houses to cover trades
Robinhood said Saturday its deposit requirements increased ten-fold this week
Company tapped credit lines for $600M and received $1B investor bailout
NEW YORK (Reuters) The clash between retail traders and Wall Street professionals that sparked roller coaster rides in the shares of GameStop Corp. may pose a risk to dozens of other stocks and potentially create a headache for the broader market, analysts said.
Market watchers identified dozens of stocks potentially vulnerable to extreme volatility after a buying spree from an army of retail traders in recent days prompted hedge funds to unwind their bets against GameStop and other companies, fueling surges in their share prices in a phenomenon known as a short squeeze. Unfortunately, it s definitely not a one-off thing, said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. The type of activity that drove that higher, I believe, has caused people to try to duplicate that in other names.
American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2020 financial results, including: Fourth-quarter revenue of $4.0 billion, down 64% year over year on a 53% year-over-year reduction in total available seat miles (ASMs).