GameStop shares soared on January 29 after stockbroker Robinhood backtracked on its strategy, responsible for the financial scandal a day earlier. The drama surrounding the video game chain sends a worrying message about the US market, said economist Ray Dalio.
Online stockbroker Robinhood allowed investors to acquire a limited number of shares issued by various companies, including GameStop and AMC. Now, those who want to invest in GameStop can buy only one share and five option contracts. Those who wish to add financial instruments issued by AMC to their balance sheet can also purchase one share and 10 option contracts.
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However, the investment app warned that no investor will be able to open more positions for each of these tools unless they sell a sufficient number of their holdings to be below the allowed limit.
Robinhood said that he dared to retract his policy because of the volatility that had previously caused his veto imposed on the purchase of certain shares.
Following the announcement, GameStop shares grew 92%, from $ 197.44 per unit to $ 379.71. Meanwhile, AMC’s share prices rose 64.97%.
The drama that has been generated around GameStop is another sign of the growing intolerance among those who share different points of view about what is happening in the United States, the founder of Bridgewater Associates, Ray Dalio highlighted in a conversation.
“What concerns me more is the general anger and almost hate and the view of bringing people down that’s almost pervasive in all aspects of the country.”
The interlocutor of the medium could have referred to the operation of Robinhood, which was behind the uproar of January 28. The application allows small investors to access the stock market without problems, as it is free and easy to use. He designed it with the goal of “democratizing finance for all.”
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While the bidding of small investors for GameStop shares appears to be a “rebellion”, it shows that they are beginning to understand “the mechanics of the markets.” “They remind me a lot (…) I started investing at an early age and I was rebellious and wanted to do it my way,” concluded Dalio.