Something strange happened to GameStop Corp. GME,
Then, roughly five minutes after the market opened, GameStop shares were suddenly halted by the NYSE, which cited the “Limit Up Limit Down” rule.
When approached by MarketWatch with a request for comment, a representative for the NYSE referred MarketWatch to a section of the exchange’s website that explains the reasoning behind “LULD” halts.
According to the site, “every security has an upper and lower price band with the reference price as the mid-point. If an offer reaches the lower price band or a bid reaches the upper price band that stock will enter a limit state (a pause) for 15 seconds.”
Within the span of about 10 minutes, trading was briefly halted twice, according to data published by NYSE, which is owned by Intercontinental Exchange Inc. ICE,
After trading resumed for the second time, the price of GameStop shares started to tumble. Shares finished the session marginally higher at $28.31, with a gain of just 14 cents, or 0.5% on the day after rising more than 24% at their peak.
The immense intraday swing marked the largest bout of intraday reversal since May 26, according to Dow Jones Market Data.
During the first hour of Monday’s session, 12,696,871 shares changed hands. That’s nearly 1,200% higher than the average volume for that period over the past 30 trading sessions, according to DJMD.
So, what triggered Monday’s madness? Analysts who follow the stock aren’t sure.
Wedbush Securities analyst Michael Pachter, who has covered GameStop for years, said he didn’t see any particular reason behind Monday’s action. Another Wall Street analyst didn’t return a request for comment from MarketWatch.
GameStop’s investor relations department didn’t return a request for comment from MarketWatch.
On a subreddit called “Superstonk,” which is dedicated to discussing GameStop, some denizens blamed the trading halt for sabotaging Monday’s rally in the stock.
To some it recalled a now-infamous incident that occurred during the original bout of “meme stock” trading mania in January 2021.
After shares reached a closing high of nearly $350 per share, Robinhood Markets and other discount electronic brokerages decided to restrict buying of GameStop shares by their customers, causing the price to dramatically decline.
Lawmakers became incensed that brokerages had seemingly deliberately saddled customers with losses. Congressional hearings were held, and ultimately a report about the incident revealed that Robinhood’s liquidity issues were more severe than the company had let on.