Scott Martin, creator of Kingsview Wealth Management and Future File’s legacy planning system, Carol Roth, provides his insights on how Wall Street and Robinhood reacted to Gamestop’s short tightening.
Robinhood expanded its restrictions on trading 13 titles on Thursday to 50 on Friday afternoon.
The titles on the shortlist range from Starbucks to Rolls-Royce, as the mobile brokerage app faces high turnover from last week through the weekend.
| Ticker | Safety | Last | change | Change % |
|---|---|---|---|---|
| SBUX | STARBUCKS CORPORATION | 96.81 | -1.34 | -1.37% |
| RR | n / a | n / a | n / a | n / a |
Robinhood did not immediately respond to a Fox Business survey, but his website points users to a Thursday blog post for more context about the restrictions.
“As a broker, we have a lot of financial requirements, including SEC net equity obligations and clearinghouse deposits,” says the post. “… These requirements exist to protect investors and the markets and we take the responsibility to take them seriously, including through the measures we take today.”
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The mobile brokerage application was examined on Thursday, after initially announcing that it was restricting transactions for “certain securities only for closing positions”, including GameStop, AMC, Nokia and 10 others.
The Robinhood app on a smartphone in New York. (AP Photo / Patrick Sison)
Robinhood founder Vladimir Tenev, in a statement late on Thursday, said that starting on Friday, the app will begin allowing limited purchases of the titles it restricts and “will continue to monitor the situation and may make adjustments as needed “.
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Users can buy a maximum of one share for most titles on Robinhood’s shortlist and up to five shares for other titles on the list, such as Rolls-Royce. The company’s website notes that “limits may be subject to change throughout the day”.
“We cannot control … the rapid diffusion of information and misinformation that occurs on social networks and, therefore, I am very sorry to our customers and employees for this,” said Tenev on Thursday.
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The restrictions came amid an unexpected rise in stock prices that short sellers expected to fall. Retail investors encouraged by the Reddit WallStreetBets online forum have accumulated shares ranging from GameStop to Blackberry and Bed Bath & Beyond, creating an increase in turnover this week.
| Ticker | Safety | Last | change | Change % |
|---|---|---|---|---|
| GME | GAMESTOP CORP | 325.00 | +131.40 | + 67.87% |
| BB | BLACKBERRY LIMITED | 14.10 | -0.55 | -3.75% |
| BBBY | BED BATH & BEYOND INC. | 35.33 | +1.69 | + 5.02% |
Some of the app’s users have filed a class action lawsuit against Robinhood that alleges that the company intentionally and voluntarily restricted certain securities transactions, putting investors who use the app at a disadvantage.
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A number of celebrities and politicians on both sides of the political spectrum have condemned Robinhood’s decision to restrict trade, and New York Attorney General Letitia James announced on Thursday that she is investigating the measure.