Low-cost broker Stake told users that it is still attempting to fix the problems caused by last week’s service outages amid the global trading frenzy triggered by a retail day trader revolt against major Wall Street short-sellers.
In a public statement Saturday evening, Stake, which offers low-cost trading for US stocks, admitted that some fund transfers have suffered delays, market orders – and market limit orders – have been cancelled. The latter automatically buys or sells a stock when it hits a specific price.
“We are working through the entirety of the weekend to solve these issues. Unfortunately, this is not as simple as spinning up more servers,” the company said.
“Our focus is expediting the recovery of the platform. Through this time, we will keep you updated as well as informed about what’s going on in the market.”
Stake was caught up in the international share market frenzy last week surrounding struggling US videogame retailer GameStop.
GameStop shares surged more than 1500 per cent last week as an army of retail day traders on Reddit forum WallStreetBets rushed to buy shares in order to create a “short squeeze” against major US hedge funds that had bet against the struggling company’s share price.
Stake is one of many brokers which have struggled under the unprecedented volume of transactions from customers. Major US brokers like Charles Schwab, Vanguard Group and Fidelity Investments also reported service disruptions.
Side effects of the Reddit-generated chaos includes a speeding ticket issued by the ASX on Friday for a small mining company with an ASX ticker which mirrors GameStop’s NYSE ticker. Its shares had jumped 51 per cent.
Sydney-based fund manager Paradice Investments missed out on a billion dollar bonanza after dumping its GameStop stake in December, one month before daytraders sent the obscure Texan company’s shares soaring.
Paradice held around 1,833,000 GameStop shares as of September 30. GameStop’s shares hovered around $US17.50 to $US18.50 in December and into early January when the Australian fund manager sold its shares.
Paradice would have netted between $US32 million to $US34 million ($41.5 million to $44 million) for selling its stake in December, rather than $US885 million ($1.1 billion) if it had waited until last week’s peak.
The stock surged 68 per cent on Friday after brokerage apps including Robinhood eased some restrictions on trading. GameStop shares fell on Thursday following the curbs, which drew calls for scrutiny from regulators and outrage from celebrities and politicians on both sides of the political aisle.
The SEC issued a rare joint statement from its acting chair and commissioners that said it was working closely with other regulators and stock exchanges “to protect investors and to identify and pursue potential wrongdoing” and would “closely review actions … that may disadvantage investors” or hinder their ability to trade stocks.
Source: Thanks smh.com