Trading apps and exchanges have stopped people buying “meme” stocks like GameStop and AMC, only allowing people to sell them on.
Robinhood, one of the biggest free trading apps on the market, was one of the first to prevent customers from buying “meme” stocks pushed by WallStreetBets and other small investors online, as the stock massively increased in price.
As National File reported yesterday, GameStop became the most traded stock on the planet on Tuesday, as Redditors and ordinary people decided to initiate a “short squeeze” against a number of hedge funds that bet against GameStop, forcing the hedgefunds to be bailed out for billions. Action already was taken against WSB, with their Discord being shut down, and some exchanges halting trades completely on their meme stocks.
In a statement, Robinhood said ironically that their mission is to “democratize finance for all,” but “in light of recent volatility, [they] are restricting transactions for certain securities to position closing only”:
[These included] $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities. We’re committed to helping our customers navigate this uncertainty. We fundamentally believe that everyone should have access to financial markets. We’re humbled to have helped many people invest in the markets for the first time. And we’re determined to provide new and experienced investors with the tools and resources to help them invest responsibly for their long-term financial futures.
— Robinhood (@RobinhoodApp) January 28, 2021
Robinhood also delisted a number of the stocks from their search results, despite the fact that nobody could buy any more of the stocks on their app.
Robinhood delisting memestonks from search results despite not even letting you buy them anyway pic.twitter.com/CXCou3MEdM
— Yeah I'd Like To Solve The Puzzle (@FinTerrorist) January 28, 2021
Trading 212, one of the biggest trading apps in the UK, also shut down buy orders on both GameStop and AMC as the market opened.
— Jack Hadfield 👍🇬🇧 (@JackHadders) January 28, 2021
Many people on Twitter accused Robinhood of colluding with Wall Street, with some users highlighting that Robinhood’s “primary revenue stream” last year was from selling orders to hedgefunds like Citadel Securities. Citadel bailed out Melvin Capital, the hedgefund that took the biggest hit from their attempt to short GameStop.
Robinhood also was subject to a huge review bomb from users, receiving over 100,000 1 star reviews in one hour on app stores.
after delisting GameStop and AMC, Robinhood has gotten over 100,000 1 star reviews in one hour on the app store, now set with a 1 rating. they deserve it pic.twitter.com/eDNDuPrj8r
— Rod Breslau (@Slasher) January 28, 2021