(ATF) Top Glove, the Malaysian latex glove maker, saw its stock rise over 8% on Friday January 29 after a Reddit forum called BursaBets pitched the firm as a successor to GameStop to rally. GameStop has seen another surge in overnight US dealing after Robinhood relaxed limits on trading.
GameStop stock fell by 44% on Thursday by the official close of US trading, but was still up by close to 900% over the last two weeks. And it is set for another sharp rally after Robinhood said it would allow resumed buying of the stocks that have seen the greatest volatility starting on Friday.
Pre-market trading indicated that GameStop could surge by another 100% after the US markets open.
Robinhood has secured extra financing from its investors and banks to meet its own capital and clearing requirements and is keen to avoid alienating its user base of retail investors.
“Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed. To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to,” Robinhood said in a statement late on Thursday. “We stand in support of our customers and the freedom of retail investors to shape their own financial future. Democratizing finance has been our guiding star since our earliest days. We will continue to build products that give more people – not fewer – access to our financial system. We’ll keep monitoring market conditions as we look to restore full trading for these securities.”
Citadel Securities – one of the market makers that Robinhood uses to route order flow – also denied that it had acted to prompt the limits on trading seen on Thursday, as did Citadel, the hedge fund, which is run separately from Citadel Securities, but has common ownership by billionaire Ken Griffin.
Earlier this week, Citadel hedge fund joined investor Steve Cohen in providing $2.75 billion to help hedge fund Melvin Capital, which was overwhelmed by retail buying of stocks it had shorted such as GameStop.
The rise in Top Glove’s stock today was not as dramatic as the GameStop movement seen this week, but Asian retail investor appetite for volatile shares that have been shorted by institutional investors is showing no signs of abating.
ALSO SEE:
Asia could be next as Reddit squeeze on hedge-fund shorts goes global
Top Glove fired whistleblower before virus outbreak
Malaysian rubber gloves put on US list of goods made by forced labour
