Stock trading app 'Robinhood' enforces trading restrictions against stock price surge, but decides to resume trading due to strong opposition
In late January 2021, individual investors gathered on the overseas bulletin board Reddit called for stock purchases such as GameStop, a game retail chain, and the stock price surged abnormally. In response to this,
Keeping Customers Informed Through Market Volatility — Under the Hood
https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-through-market-volatility
Robinhood restricts trading in GameStop, other names involved in frenzy
https://www.cnbc.com/2021/01/28/robinhood-interactive-brokers-restrict-trading-in-gamestop-s.html
The beginning of the series of events was that the stock price of GameStop, the world's largest game retail chain, tripled in five days due to purchases by individual Reddit investors. This move is due to the information that 'hedge funds are aiming for profits by short selling in anticipation of a decline in GameStop shares', and individual investors who oppose hedge funds and institutional investors are raising GameStop shares. It is believed to have been aimed at.
Due to the surge in GameStop stock, hedge funds that set up short sales had no choice but to cut losses. It was also analyzed that there was ' anger at hedge funds and institutional investors ' as to why Reddit's individual investors were so enthusiastic.
Reddit people shoot short-selling hedge fund, stock price of the world's largest game retail chain triples in 5 days-GIGAZINE
Robinhood, a stock trading app popular with individual investors, has announced that it will limit multiple stock trading, including GameStop, in response to stock price volatility. Robinhood has informed that it will not allow new purchases of certain shares, but only 'position closes' to sell and liquidate shares. In addition to GameStop, AMC Entertainment, which operates a movie theater chain, BlackBerry, a software and telecommunications equipment manufacturer, and Bed Bath & Beyond, a general merchandise retail chain, are all subject to restrictions on stocks whose stock prices have skyrocketed in the latest market price. ..
However, Robinhood's decision was strongly criticized by individual investors, resulting in over 100,000 negative reviews posted on the Google Play app distribution page. In addition, at the time of writing the article, a large number of negative reviews have been deleted.
Robinhood Android app gets review-bombed over stock block --9to5Google
https://9to5google.com/2021/01/28/robinhood-android-review-bomb-gamestop/
Also, on January 28, Robinhood users filed a class action in a federal district court in the Southern District of New York, claiming that they 'intentionally restricted the trading of certain shares in order to manipulate the market.' We requested that you start trading immediately on restricted stocks.
Robinhood customer sues trading app over GameStop restrictions
https://www.cnbc.com/2021/01/28/robinhood-customer-sues-trading-app-over-gamestop-restrictions.html
Not only individual investors have blamed Robinhood's response, but lawmakers from both the Democratic and Republican parties have also blamed it.
GameStop: Cruz, Ocasio-Cortez blast Robinhood over trade freeze
Democratic Congressman Ro Khanna points out that while apps like Robinhood are restricting individual investors from trading GameStop shares, hedge funds are still able to buy shares. He accuses inequality between individual and institutional investors.
Also, when Democratic Representative Alexandria Ocasio-Cortez posted a tweet condemning Robinhood's response, like Mr. Kanna, Republican Senator Ted Cruz responded, 'I fully agree.'
Fully agree. Https://t.co/rW38zfLYGh
— Ted Cruz (@tedcruz) January 28, 2021
In response, the House's Financial Services Commission and the Senate's Banking Commission have announced that they will hold hearings on the impact of the stock market on online equity trading platforms, retail investors and Wall Street.
Robinhood, which received a fierce backlash, issued an official statement again, announcing that from January 29th, it will be possible to purchase stocks such as GameStop, AMC Entertainment, BlackBerry, Bed Bath & Beyond with restrictions. Robinhood explains that the suspension of purchases was not under external pressure, but based on internal risk management.
An Update on Market Volatility — Under the Hood
https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatility
Robinhood will allow'limited buys' of stocks like GameStop, starting on January 29th --The Verge
https://www.theverge.com/2021/1/28/22255031/robinhood-gamestop-stop-purchases-reddit-wsb-stock-market
In addition, the impact of the stock price surge has spread not only to stock trading apps but also to other SNS. In a series of turmoil, chat tool Discord gathered a group of Reddit investors saying, 'Despite several months of warning, hate and discriminatory content continued to be allowed.' The WallStreetBets server has been removed.
Discord removes server for individual investors who have caused the stock price of the game retail chain to skyrocket --GIGAZINE
However, it has since been reported that Discord staff are working with the management team on the 'r / WallStreetBets' server to help moderate content.
Discord is no longer banning r / WallStreetBets — it's helping them --The Verge
https://www.theverge.com/2021/1/28/22254339/discord-r-wallstreetbets-server-help-moderation-ban
A few hours after the 'r / WallStreetBets' server was removed, the administrator blamed Discord. According to the administrator, the 'r / WallStreetBets' server has hundreds of thousands of members and the number continues to grow, making it impossible to fully moderate the content posted to the server. As a result, it seems that discriminatory content was not deleted and remained.
The admin said, 'We blocked all the bad words in the bot. This should have been enough, but someone posted bad words using the
A Discord spokeswoman said in a statement, 'WallStreetBets members have set up new servers and we are working with them. We welcome the group as long as we improve moderation and follow community guidelines.' I am commenting.
Meanwhile, on January 27, 2021, Facebook deleted a Facebook group called 'Robinhood Stock Traders,' which has 157,000 users. The reason for the removal was 'violating the policy on adult sexual exploitation', but the details were not explained in the notice, and the group's founder, Allen Trang, was within the group. He said he had never seen adult content. 'All major institutions are dissatisfied with the success of individual investors,' said Trang, arguing that large corporations are trying to dissolve a group of individual investors.
Facebook shuts popular stock trading group amid GameStop frenzy | Reuters
https://www.reuters.com/article/us-retail-trading-facebook-idUSKBN29X34P
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