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GameStop’s adventure in the stock market continues, with stocks rising more than 70% in Friday’s trading. The peak occurs when Robinhood opens “limited purchases” of GameStop, AMC and other stocks after the trading app restricted some transactions the day before. However, the app on Friday confirmed that it has temporarily turned off instant cryptocurrency buying power due to “extraordinary market conditions” like the price of bitcoin and dogecoin – a digital currency inspired by a popular dog meme – has also risen sharply.
Behind the meteoric rise of GameStop, dogecoin and other actions: Reddit users who came together to face the establishment of Wall Street.
The rebellion experienced a hiccup when individual investors I discovered some commerce sites and applications it had restricted securities transactions from the defeated video game dealer, as well as from the AMC film network and other companies. Robinhood, a popular application for investors, has prevented customers from buying more shares in several companies, but is allowing “limited purchases” from Friday.
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On Thursday morning, Twitter users began posting screenshots of their Robinhood app that showed a message appended to the pages of GameStop, AMC, Nokia and Bed, Bath and Beyond: “This stock is not supported on Robinhood.”
Robinhood explained the move in a blog post before trading opened. “In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK,” the company wrote. In addition to AMC; Bed, Bath and Beyond; GameStop and Nokia, the companies listed by ticker symbol are phone maker BlackBerry, fashion retailer Express, headphone maker Koss, and underwear company Naked Brand Group.
Robinhood later sent an email to customers saying it would allow “limited buys” of those securities starting Friday. It made the decision because of US Securities and Exchange Commission regulations.
Robinhood CEO Vlad Tenev went on CNBC Thursday afternoon to explain why the investment app decided to restrict users from purchasing shares of GameStop, AMC and other companies.
“In order to protect the firm and protect our customers, we had to limit buying in these stocks,” Tenev said. He also denied there were any liquidity issues with the company.
The @wsbmod Twitter account, which is tied to a Reddit community that’s been driving recent trades, said the freeze harmed small traders and favored the Wall Street establishment. “Individual investors are being stripped of their ability to trade on [the Robinhood app]”said the tweet.” In the meantime, hedge funds and institutional investors can continue to trade normally. “
A class action lawsuit was opened on Thursday in the Southern District of New York.
Webull, another investment service, tweeted on Thursday that it began to restrict trading in shares of GameStop, AMC and Koss. Webull cited the “extreme volatility” of stocks by limiting user transactions to closing positions. Later removed those restrictions.
US Congresswoman Rashida Tlaib, Michigan Democrat, called the House Financial Services Committee to hold a hearing on Robinhood’s actions. She described her efforts as “market manipulation”.
This is beyond absurd. @FSCDems you need to have an audience on Robinhood’s market manipulation. They are blocking the bargaining power to protect Wall St.’s hedge funds, stealing millions of dollars from their users to protect people who have used the stock market as a casino for decades. https://t.co/CGkJxVfzkv
– Rashida Tlaib (@RashidaTlaib) January 28, 2021
Other members of Congress, including Rep. Alexandria Ocasio-Cortez and Sen. Ted Cruz, agreed to the call for a hearing.
TD Ameritrade, another broker, said on Wednesday that it would place restrictions on trading shares in GameStop, AMC and others. The broker confirmed the restrictions, saying it made the decisions “out of extreme caution amid unprecedented market conditions and other factors”.
“In the interest of mitigating risk for our company and customers, we have placed several restrictions on some transactions” in GameStop, AMC Theaters “and other securities,” said TD Ameritrade.
A spokesman for TD Ameritrade said the restrictions include increasing stock lending requirements, known as margin, and limited transactions, such as short sales.
Nasdaq CEO Adena Friedman told CNBC on Wednesday that the stock exchange would halt trading and investigate whether it believed someone was manipulating the market. AMC is listed on the Nasdaq, while GameStop is traded on the New York Stock Exchange.
Massachusetts Community Secretary William Galvin told Barron’s that the New York Stock Exchange should “consider simply suspending [GameStop] for a month.”
The SEC is also monitoring the situation.
“We are aware and actively monitoring ongoing market volatility in the options and stock markets, and consistent with our mission to protect investors and maintain fair, orderly and efficient markets,” said the SEC in a statement. declaration Wednesday “We are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries and other market participants.”
The White House is “monitoring the situation,” White House press secretary Jen Psaki said on Wednesday.
Correction, January 28: An earlier version of this story incorrectly said that TD Ameritrade had restricted further purchases of shares in GameStop and AMC. He is restricting certain trades, but users can still buy new shares from these companies.