The GameStop stock price rose into the green on Thursday despite falling sharply at the opening bell as platforms moved to curb trading in the security.
GameStop plunged to around $290 when trading opened but rapidly recovered to stand 27.77% higher at $443.29 by 9.58am ET.
A battle between hedge funds who had been shorting the company's shares and day traders on the Wall Street Bets internet forum on Wednesday pushed the GameStop stock price up 134.84% to $347.51. GameStop stock has risen more than 700% in the last 5 days.
Day traders, organizing their efforts on Reddit and alternative platform Discord, also drove up the prices of heavily-shorted stocks such as cinema chain AMC, hammering short-sellers. The resulting "loss porn" has caused glee among Wall Street Bets members.
Yet the stock whipsawed at the open after popular trading platform Robinhood curbed transactions in GameStop and other popular names such as AMC, BlackBerry, Bed Bath & Beyond and Nokia.
The discount brokerage told clients they can only close their positions and cannot buy new shares. Robinhood said it was doing so "in light of recent volatility".
Members of Reddit's Wall Street Bets forum expressed frustration that trading in their favorite stocks had been curtailed, with one popular post calling it "market manipulation".
Pre-market trading in GameStop stock was highly volatile, with the stock rising more than 40% before falling into the red as platforms limited access.
"Bought at pre-market. Buying more at open. It's not over til the fat lady sings," one Reddit user said on the Wall Street Bets forum in the early hours of the morning before markets opened.
Other Wall Street Bets targets - many of which have been heavily shorted by hedge funds - fared less well in early trading. AMC was down around 25% while Bed Bath & Beyond fell around 17%. A short position is a bet that a stock will fall.
David Madden, market analyst at trading platform CMC Markets, said an array of shorted companies "could be in for high volatility again as the short-squeeze tactics might be in play".
Madden said he thought the GameStop phenomenon was having wider implications in the markets.
He said some hedge funds are "scrambling to close out positions in a bid to offset painful losses they incurred when shorting certain stocks that underwent enormous rallies".
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