GameStop stock surges again after trading app Robinhood lifts restrictions for rookie investors

But it hasn’t stopped the controversy chasing the app’s decision to implement a ban, with more moves for investigations and users leaving.

When Reddit renegades and amateur investors had their trading restricted on GameStop shares by Robinhood, there were calls from politicians for an investigation and a slew of lawsuits filed. But now the app has made a stunning reversal.

It eased restrictions on trading on Friday, announcing it would let traders buy and hold limited numbers of stock. Trading was tightly controlled with a limit of five shares or 10 options to buy or sell.

It saw the brick-and-mortar video game retailers shares surge up to 114 per cent to $US413 ($A542) when the market first opened before closing at a value of $US325 ($A426) on Friday.

Individuals investors, many from the Reddit sub group WallStreetBets which has grown to six million members, have driven the share price of GameStop up using an app called Robinhood. It lets anyone trade stocks without commission, with the Reddit rally attempting to stop the “fat cats” of Wall Street from making profits by short selling.

Google had its work cut out for it on Thursday when it appeared to remove nearly 100,000 negative reviews for Robinhood on the back of its GameStop trading ban, while some customers declared they would be leaving the app, describing the restrictions as a betrayal.

RELATED: Why Reddit is causing panic on Wall St

The Robinhood app was hit by lawsuits and nearly 100,000 negative Google reviews before it reversed its ban on trading on GameStop shares. Picture: Olivier Douliery/AFP

Cameron Smith, 23, from New York, told the New York Post he was withdrawing $US22,000 ($A29,000) in profits from his GameStop trades and redirecting $US6000 ($A8000) into a new account with JPMorgan, which promises $0 commission trading.

“I was sitting on $US19,000 ($A25,000) of buying power on Thursday and getting ready to do another option call because I thought the stock would reach $US500 ($A656) when I heard that trading on Robinhood was frozen,” he told The Post. “I thought, ‘Wow this is not good,’”

Being locked out while institutional investors covered their losses had him seething, he said. “They are playing dirty,” he said of Robinhood.

Reddit users have been urging each other to hold onto GameStop stock throughout the market turmoil, which has seen its shares swing from wild highs – surging by 68 per cent on Friday alone – but with massive drops throughout the week. The novice traders have said they would push the company’s share price up to $US1000 ($A1300) or $US5000 ($A6500).

The wild swings forced Robinhood to raise over $US1 billion ($A1.3 billion) on Thursday to help meet the increased demand and in part to pay out users for their trade as its services were strained, reported The New York Times.

In a rare move, the US Securities and Exchange Commission announced it would scrutinise the restrictions imposed that “may disadvantage investors” or “unduly inhibit their ability to trade”.

RELATED: ‘Sick, irrational’ frenzy plaguing GameStop

US Senator Elizabeth Warren has expressed concern about the wild trading and its impact on ordinary people and the broader economy. Picture: David Becker/Getty Images North America/AFP

Massachusetts senator Elizabeth Warren had written to the Commission asking for an investigation amid concerns about “casino-like” swings in the value of GameStop, she said.

“In addition to GameStop, several other publicly traded companies, including AMC; BlackBerry; Bed, Bath and Beyond; Nokia; and Tootsie Roll Industries, have seen huge shifts in their share price driven by similar internet trading schemes,” she wrote.

“These wild fluctuations are just the latest indication that many private equity firms, hedge funds and other investors, big and small, are treating the stock market like a casino, giving little consideration to the companies, communities, workers and consumers that may be affected by these risky bets. The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers or the broader economy.”

The New York Stock Exchange where crazy trading is playing out. Picture: Spencer Platt/Getty Images/AFP

The GameStop controversy has united unlikely political foes, with congresswoman Alexandria Ocasio-Cortez and Donald Trump Jr both hitting out at Robinhood’s decision to restrict trade.

It was also seen on Sunday when dozens of members of the New York Young Republicans Club staged a protest against hedge funds targeting GameStop, with the group’s president Gavin Wax claiming there is “blatant corruption” going on, reported the New York Post.

“There’s two standards,” he said in a speech to protesters. “There’s rules for thee, not for me. You got these big hedge-fund guys who are trying to short companies into the ground, and then they got called on their bluff by a bunch of anonymous day traders on Reddit.

“And then they have the balls to call those guys unsophisticated,” he said. “God bless the little guy for making an honest buck and showing them how the market really works.”