Robinhood, the fee-free investment app that has helped Redditors and other retail investors pump dark horse stocks like GameStop, AMC, BlackBerry, and Nokia, has stopped allowing users to buy those stocks and other YOLO picks.According to screenshots shared on social media, on Thursday morning a notification appeared on Robinhood telling users that they could close their position on GameStop's stock but not buy any additional shares. Redditors are currently panicking, looking for ways to transfer their shares of GameStop off of Robinhood to other platforms, and are generally furious at the platform.
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In a blog post, Robinhood confirmed that it has placed restrictions on several stocks due to volatility. “We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities,” the blog post read.
Robinhood did not respond to a request for comment.
Have you made money buying GameStop stock? Do you work at Robinhood or another trading platform? We'd love to hear from you. Using a non-work phone or computer, you can contact Jordan Pearson securely on Wickr at jordanpearson, or email jordan.pearson@vice.com.Motherboard was unable to place orders to purchase shares or fractional shares of GameStop, AMC, BlackBerry, or Nokia in pre-market trading on the RobinHood app. We were able to buy a stock we picked randomly—something called SRNE—with no problem. "This stock is not supported on Robinhood," a message reads when we tried to purchase GME. Searches for "GameStop" and "GME" on the app itself no longer return any results.This is likely to have a massive impact on Robinhood users and ultimately the company. Holders are now unable to freely trade it; the app is only allowing users to close out their positions, meaning they can sell it but not buy more. This is potentially devastating for novice investors or those who simply want to follow the general marching orders of the r/WallStreetBets subreddit, which is to hold (and buy more) GameStop stock until further notice.
Over the past week, the stock market has gone haywire as retail investors on the /r/WallStreetBets subreddit decided to buy the stock of the video-game retailer GameStop en masse. The idea was that GameStop's stock was extremely undervalued, and that hedge funds had overextended themselves by betting against it, or "shorting" it. Now that the meme has caught on and been encouraged by Elon Musk (who famously despises short sellers and whose company Tesla is another retail investor darling), GameStop's stock is worth roughly $350, up from $4 in December. BlackBerry, AMC, and Nokia, other WallStreetBets favorites, are also up.The result has been chaos for the funds that shorted GameStop, with Melvin Capital needing to call in a multibillion-dollar backstop investment to cover its losses. In response, several large trading platforms temporarily halted trading on the affected stocks. On Wednesday, the New York Stock Exchange halted trading of GameStop and AMC, and Canada's trading regulator halted BlackBerry. TD Ameritrade restricted users from trading GameStop, AMC, and other stocks, but was not specific about the timeline.
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A trading halt is usually implemented to protect investors from volatility or manipulation, usually lasts just a few minutes, and is relatively common. In its announcement on BlackBerry, the Canadian regulator noted that halts are enacted "to ensure a fair and orderly market." TD Ameritrade, meanwhile, says it restricted trading "out of an abundance of caution amid unprecedented market conditions."
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To many retail investors, these justifications seemed like large platforms running cover for institutional investors being buffeted by the chaos. Chaos, notably, that large institutions often foment and exploit for profit themselves. Indeed, establishment-types are very, very mad at retail investors right now. On Wednesday, Secretary of the Commonwealth of Massachusetts William Galvin even suggested that platforms should halt trading for an entire month for the affected stocks.With trading platforms, regulators, and politicians all in the mix now, it seems like the GameStop saga is still far from over.Update: This article was updated to include Robinhood’s blog post.Correction: An earlier version of this article stated that 56 percent of Robinhood users hold GME stock. This is incorrect, based on a misreading of a statistic on Robinhood. Motherboard regrets the error.
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Tenev said Robinhood halted buying activity on GameStop and 12 other securities to enable it to continue to meeting clearinghouse deposit requirements.
On January 28, 2021, brokers inexplicably halted trading on GameStop shares thus capping any further losses to Melvin Capital while at the same time capping potential further gains for the retail investors. Most of the retail investors were customers of one brokerage firm— Robinhood, Inc.
Robinhood was accused of concealing how its business relied heavily on "payment for order flow," with the Menlo Park, California-based company collecting "unusually high" fees from outside broker-dealers who processed customer trades.
Jan 27 (Reuters) - A U.S. federal court on Thursday dismissed a lawsuit accusing Robinhood Markets Inc of violating state laws by restricting trades on so-called meme stocks during a January 2021 rally, a move that retail traders allege resulted in billions in losses.
(the “Lawsuit”). The Lawsuit alleges that Robinhood violated Washington law by substantially assisting in the transmission of unsolicited commercial text messages to prospective customers as part of its refer-a-friend marketing program.
But the day after GameStop reached its peak, Robinhood abruptly restricted trading in some meme stocks, claiming that it had been forced to do so by a liquidity crunch, Wall Street rules and clearinghouse limits. The restrictions caused the stocks to plunge, prompting lawsuits, congressional hearings and an S.E.C.
Your account will be flagged for pattern day trading if you make 4 or more day trades within 5 trading days, and the number of day trades represents more than 6% of your total trades in that same 5 trading day period. This rule only applies to margin accounts and IRA limited margin accounts.
Free-stock trading pioneer Robinhood and Interactive Brokers took steps to curb the wild trading activity in heavily shorted names like GameStop. In some cases, investors would only be able to sell their positions and not open new ones. The brokers also raised margin requirements for certain securities.
Robinhood just delivered positive financial results for Q4 2023, but its largest source of revenue could soon take a hit. Life as a public company has been a rollercoaster for Robinhood Markets (HOOD 3.70%).
According to the SEC's order, between 2015 and late 2018, Robinhood made misleading statements and omissions in customer communications, including in FAQ pages on its website, about its largest revenue source when describing how it made money – namely, payments from trading firms in exchange for Robinhood sending its ...
For instance, Robinhood is a very sleek and minimal application, and investor tools are rudimentary compared with those of other major brokerages like Charles Schwab and E*Trade. This can lead to hasty and uninformed decision-making, especially for novice investors.
The SEC opened a civil fraud probe into Robinhood in September 2020, over allegations that it failed to disclose that it was selling clients' orders to high-frequency trading firms.
Robinhood users aren't so merry. Popular investing app Robinhood became the focus of the controversy after it decided to freeze trades for GameStop on Jan.28. Shares of the video game retailer spiked after traders on Reddit began frantically buying the company's stock.
Robinhood only had enough money to support X amount of buys. When that money ran out, Robinhood was unable to buy, and could only sell GME. Of course, this only happened for 2 days as the stocks / money exchanged hands.
GameStop (GME) shares were halted from trading multiple times due to volatility Monday morning after the meme stock soared with the online return of Keith Gill, who was a key driver of the stock's surge in late 2020 and early 2021.
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