GameStop shares fell more than 30% and were briefly halted on Monday as the Reddit-fueled frenetic trading extended into February.
Shares of the bricks-and-mortar video game retailer closed down 30.8% on Monday. GameStop jumped as much as 18% to $384.89 in premarket trading.
The stock surged 1,625% in January as point-and-click investors piled into the name while hedge funds rushed to cover their losses from shorting the stock.
The astronomical rally has inflicted a mark-to-market loss of almost $13.5 billion to hedge funds with short positions against the stock, according to data from S3 Partners through Friday's close.
Robinhood and other trading apps continue to limit buying of GameStop stocks and options contracts, along with those of other heavily shorted names, following a week of hugely volatile trading due to a retail trading frenzy led by 5 million-strong Reddit thread "WallStreetBets."
Currently, Robinhood only allows clients to buy 20 shares of GameStop, unless they already own shares 20, in which case the client can't buy any shares. Robinhood eased the restrictions on Monday before announcing another $2.4 billion cash injection.
AMC Entertainment closed up 0.3% after jumping more than 20% earlier in the session.
Most of the other restricted names were lower on Monday, including Express, which is down nearly 17%, Koss, which dropped about 45%, and Naked Brand Group, which fell nearly 14%.
Genius Brands, BlackBerry and Nokia were the restricted names that traded higher on Monday.
Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value will fall below that level when it's time to pay for the borrowed shares.
— CNBC's Yun Li contributed to this report.