Robinhood Bans GameStop Trading and Users Are Furious

Previously, we talked about the impact that Reddit day trading forums were having on the stock market. Through R/WallStreetBets, multiple discord forums, and a lot of social media promotion, stocks including $AMC, $GME, $NOK saw massive returns, with $GME currently sitting at over $300. For context, it was at $30 just a week or so before. 

Recently, however, Robinhood took action. As a free and relatively easy investing app for beginners, many of the traders used Robinhood to buy, hold, or sell their shares in the company. Thus, with Robinhood holding the power to save Wall Street shorters, they halted trading on a whopping 50 different stocks, many of which were inspired by Reddit’s army. 

As of now, the list is down to 8, including:

• AMC
• Nokia
• Gamestop
• Naked Brand
• Genius
• Blackberry
• Express
• Koss

Naturally, traders weren’t happy at the thought of their legal trades being blacklisted, especially if top-level executives were getting bailed out once again. Alexandria Ocasio-Cortez tweeted the following:

“This is unacceptable. We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds can freely trade the stock as they see fit. As a member of the Financial Services Cmte, I’d support a hearing if necessary.”

Proponents of the recent surge of amateur traders argue that hedge funds and shorters shouldn’t be bailed out simply because they were beaten at their own game and believe that Robinhood’s recent actions are both undemocratic and illegal. Multiple users tweeted their disapproval for the actions of Robinhood, noting that their name was contradictory, as they seemed to be more concerned with giving to the rich than the poor. 

Thus, a small series of protests erupted on Wall Street and beyond, with dozens of people yelling “eat the rich!” outside of the New York Stock Exchange. 

The situation begs the question of how free the stock market should be and whether certain rights should be reserved or abolished for beginner investors.