People Are Accusing Robinhood Of Stealing From The Poor To Give To The Rich After It Limited Trading On GameStop Shares
The online brokerage app was criticized for blocking purchases for certain stocks.
Robinhood, an online brokerage app named after a folk hero who steals from the rich to give to the poor and whose mission is to "democratize finance for all," has barred the purchase of GameStop and AMC shares amid a coordinated effort from redditors to drive up the stock prices of certain companies.
The app cited "recent volatility" in the stock market in a statement Thursday morning, saying users can close out their positions but cannot buy more stock.
"We continuously monitor the markets and make changes where necessary," Robinhood said. "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. We also raised margin requirements for certain securities."
In recent days, investors on the subreddit r/WallStreetBets have managed to drive up the stock price for a number of companies — most prominently GameStop and AMC — to the detriment of hedge funds betting against these stocks. (If you want a more thorough rundown of how this is happening and why it's giving Wall Street such a headache, read this and this.)
Robinhood is not the only major trading company that has limited transactions for these stocks, whose price surge Reddit users have said will help them pay off student debt and medical bills, among other things. TD Ameritrade and Charles Schwab also placed similar restrictions on Wednesday.
Robinhood has been criticized in the past for "gameifying" investing, as it has no account minimums and trading fees, and showers confetti on your phone screen when you buy a stock. So it was widely mocked online for blocking purchases for these stocks.
Lawmakers also criticized brokerage firms, some explicitly naming Robinhood.
Even Ja Rule was mad.
Users also flooded app stores with one-star reviews of Robinhood.
Redditors, however, are determined to hang on to their stock and send a message to Wall Street.
Robinhood did not respond to a request for comment.