by Samuel Indyk
Investing.com - A group of heavily shorted US stocks fell in early pre-market trade on Thursday with the dramatic rise in share prices put on hold. At 10:20GMT, GameStop Corp (NYSE:GME) shares fell 2.5%, BlackBerry Ltd (NYSE:BB) shares were down 13% and AMC Entertainment Holdings Inc (NYSE:AMC) Shares were lower by 14% in pre-market.
The pause in the rally came after the popular Reddit forum WallStreetBets was temporarily put on private due to a huge increase in activity and comments. Discord banned the WallStreetBets server, citing “hateful and discriminatory content.” Discord went on to say that the server was not banned due to financial fraud related to GameStop or other stocks.
A similar pattern was seen in the European stocks that had benefitted from the squeeze this week. Nokia Oyj (HE:NOKIA) shares, which had opened higher by 8% are now trading lower by 4%. Pearson PLC (LON:PSON) – the top performer in the FTSE 100 on Wednesday – was lower by 4% and German pharmaceutical company Evotec AG O.N. (DE:EVTG) was lower by 4.6%.
Regulation
The US Securities and Exchange Commission said on Wednesday it is actively monitoring volatility in options and equities markets after the seemingly unstoppable rally in share prices. “We are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants,” the SEC said.
In his post-decision press conference, Federal Reserve Chair Jerome Powell declined to comment on the activity, saying a day’s market activity or commenting on a particular stock is not something that he would typically comment on.