Robinhood restricting the buying of certain stocks has drawn criticism from politicians and traders alike, accusing the platform of protecting Wall Street.
Well, the Robinhood saga continues to roll on, as the trading platform now faces legal action after it restricted its users from buying certain stock (such as GameStop) in the wake of a spite-based buying surge birthed on Reddit.
On the Reddit board r/WallStreetBets, some of its 4 million members reported trading platform Robinhood was now preventing investors from buying GameStop and other ‘stonks’ that experienced historic gains this week.
Gamestop (which has dropped in value since the move) was at the heart of the boom, with the retailer growing by 1,900% in 2021, primarily to short hedge fund short-seller Andrew Left of Citron Capital, who bet against GameStop, and was ultimately met with a wave of greed-is-good-but-only-if-you’re-poor buying. Robinhood also shut down buying of AMC (AMC), BlackBerry (BB), Bed Bath and Beyond (BBBY), Express (EXPR), Koss (KOSS), Naked Brand Corp (NAKD) and Nokia (NOK), all ‘stonks’ that were purchased in the rush.
“Robin Hood: a parable about stealing from the rich to give to the poor. Robinhood: an app about protecting the rich from being short squeezed by the poor,” tweeted fintech lawyer Jake Chervinsky.
“Interactive Brokers has put AMC, BB, EXPR, GME, and KOSS option trading into liquidation only due to the extraordinary volatility in the markets,” Robinhood tweeted. “In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice.”
Politicians have already criticised the mood with Democrats Rashida Tlaib and Alexandria Ocasio-Cortez calling the decision “beyond absurd”, with the former suggesting that Robinhood is “blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who’ve used the stock market as a casino for decades.”
The restriction of trading oscillates between ironic and the grimmer aspects of late-stage capitalism, as the platform is ostensibly freezing out small investors while the larger, more powerful hedge funds rush to get control of the situation.
Interestingly, some of these small traders (the mom-and-pop traders in mom-and-pop’s basement, if you will) have opted for altruism, with a post on r/wallstreetbets proclaiming that “When this is over and the battle is won – let’s do something the fat cats on Wall Street will never do. Let’s donate some of our earnings to a deserving charity”.
Elsewhere, one user explained that the bout of spiteful reverse-engineering of the economy help saved his best friend’s life, as he was unable to afford the $4,000 veterinarian bill. By “putting all his money” on the shares targeted by Reddit, he was able to pay for the surgery, and remains “in tears and really grateful”.
Just throwing it out there, but if it takes major manipulation of the economy in order to pay a veterinarian, then perhaps the economy isn’t worth saving.