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.
Trading apps: Here, have zero-cost trading and options access, go wild Also trading apps: Woah not like *that*
invisible hand of the market looking visible as fuck today
Robinhood should have called their app "Maintain" or "Status Quo."
Robinhood, named for the heroic outlaw of yore who famously undermined the poor to protect the rich.
This Robinhood story should tell you everything you need to know about capitalism. No one cares about poor people, but institutions will move heaven and earth to protect the interest of the rich
A bunch of investment apps have completely prevented regular folks from buying meme stock so the richest of the rich can "prepare" behind closed doors. Some people are learning in real time how the free market has never been free.
The irony of an app named Robinhood being the protector of the bourgeoisie in the midst of a global pandemic is palpable
I can’t believe the class war is about to begin. Over GameStop no less
Lawmakers also criticized brokerage firms, some explicitly naming Robinhood.
@RoKhanna Full statement from @RoKhanna here:
This is beyond absurd. @FSCDems need to have a hearing on Robinhood's market manipulation. They're blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who've used the stock market as a casino for decades. https://t.co/CGkJxVfzkv
Why are brokerage firms like Robin Hood restricting trading in GameStop? Looks to me like a fear of too much profit going to ordinary investors. Can you explain @RobinhoodApp? https://t.co/682yG7ZiqX
This is unacceptable. We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
Even Ja Rule was mad.
Yo this is a fucking CRIME what @RobinhoodApp is doing DO NOT SELL!!! HOLD THE LINE... WTF 🤬
Users also flooded app stores with one-star reviews of Robinhood.
Everyone who has Robinhood should give it a 1 star rating and write a bad review; take it off the map
@RobinhoodApp Everyone do the same in the App Store
I hit the 1 star rating so many times on Robinhood on the App Store I think I just broke my thumb
Redditors, however, are determined to hang on to their stock and send a message to Wall Street.
After I make my billions in the stock market i'm going to buy Robinhood and remove it from the face of the earth. HOLD THE LINE. DO NOT SELL. 🚀🚀🚀
THIS. IS. THE. TYPE. OF. ENERGY. I. NEED. IN. MY. LIFE. DO. NOT. SELL.
these GameStop redditors remind me of this scene in spongebob I love you all so much! STAY IN! DO NOT SELL!!!
Robinhood did not respond to a request for comment.