The market madness that started with short-selling drama at GameStop has escalated past day-traders’ wildest nightmares, because the once-popular brokerage app Robinhood is now successfully stopping customers from shopping for some 50 shares.
Robinhood customers angrily took to Twitter to show screenshots indicating the app was blocking them from shopping for greater than a single inventory of some firms. The buying and selling lockdown on Friday wasn’t restricted to GameStop ($ GME) – customers had been posting comparable pictures of failed efforts to commerce different shares of firms that appeared to have a richer future than a brick-and-mortar online game retailer.
A number of screenshotted their frustrations at attempting to purchase Churchill Capital Funding (CCIV), which is reportedly poised to merge with luxurious electrical car firm Lucid Motors. If the merger goes via, its worth might hit $ 15 billion – however that doesn’t matter for merchants utilizing an app that received’t allow them to purchase the inventory.
$ CCIV Hey @RobinhoodApp what on this planet are you doing?
I simply acquired this picture from one in every of my followers…
Nobody is brief squeezing $ CCIV
This can be a nice SPAC with a life altering merger…
You severely are messing with the flawed folks… pic.twitter.com/yRnnk4gJ1d
— Alex Cutler (@alexcutler247) January 29, 2021
It turned out Robinhood is proscribing a whopping 50 shares, with the variety of shares retail merchants should purchase on that listing starting from 1 to five.
The app even restricted buying and selling in cryptocurrencies, citing “extraordinary market circumstances” on Friday – and presumably chasing away its previous couple of prospects to opponents like WeBull and extra established buying and selling accounts like Schwab and Constancy.
I really like the way it appears to be like like my portfolio has flatlined, identical to Robin Hood’s Model ? pic.twitter.com/5yn3hwHJez
— Eli Burton (@EliBurton_) January 29, 2021
Robinhood rapidly grew to become probably the most hated app on the web this week, after it shut down buying and selling in $ GME, one-time smartphone pioneer BlackBerry ($ BB), and theater operator AMC ($ AMC). Day-traders on Reddit’s WallStreetBets subreddit drove up the costs of these shares, locking insanely rich hedge funds into untenable brief positions although the businesses themselves had been value a mere fraction of their spiked market valuation.
Amid the laments of billionaires and well-heeled monetary gurus claiming they’d been unfairly focused by the unwashed lots, Robinhood – partially owned by hedge fund Citadel, which misplaced heaps of cash amid the GME drama – has been accused of coming to the rescue of its ruling-class backers by stopping additional trades in shares beloved by WallStreetBets.
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Robinhood CEO Vlad Tenev has taken to CNBC and CNN to disclaim that, claiming that the choice was dictated by rules, somewhat than hedge funds. This, nevertheless, didn’t persuade the livid customers – and he failed to supply any particulars to show his level.
Offended merchants swarmed the app’s Google opinions web page, just for Google to take away lots of hundreds of destructive scores on Friday. A category motion lawsuit in opposition to Robinhood was filed with the Securities and Trade Fee on Thursday. Attorneys-general of New York and Texas are reportedly wanting into Robinhood and different firms over their conduct in limiting inventory buys.
The entire saga even briefly introduced American politicians collectively, as New York Democrat Alexandria Ocasio-Cortez demanded solutions from Robinhood and Texas Republican Ted Cruz provided to assist. Nonetheless, that second didn’t final lengthy, as AOC didn’t want to seem sympathetic to Cruz, who she claimed had tried to “get her killed” by voting in opposition to the certification of Joe Biden’s electoral victory.
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Even CNN’s Chris Cuomo – who apparently labored in finance previously – went after the Robinhood CEO throughout his interview, refusing to permit Tenev to dazzle him with funding jargon. As Tenev insisted shutting down buying and selling was essential to “adjust to monetary necessities,” Cuomo referred to as him out for the “smelly battle” of curiosity between Robinhood and Citadel.
