Robinhood, the fee-free investment app that has helped Redditors and other retail investors pump dark horse stocks like GameStop, AMC, BlackBerry, and Nokia, has stopped allowing users to buy those stocks.
According to screenshots shared on social media, on Thursday morning a notification appeared on Robinhood telling users that they could close their position on GameStop’s stock, but not buy any additional shares. Robinhood did not respond to a request for comment, and it is unclear if anything is going to change after the market officially opens at 9:30 a.m. EST. Redditors are currently panicking, looking for ways to transfer their shares of GameStop off of RobinHood to other platforms, and are generally furious at the platform.
Motherboard was unable to place orders to purchase shares or fractional shares of GameStop, AMC, BlackBerry, or Nokia in pre-market trading on the RobinHood app. We were able to buy a stock we picked randomly—something called SRNE—with no problem. “This stock is not supported on Robinhood,” a message reads when we tried to purchase GME. Searches for “GameStop” and “GME” on the app itself no longer return any results.
This is likely to have a massive impact on Robinhood users and ultimately the company. According to a popup on the app’s homepage, 56 percent of all Robinhood users own at least some GameStop stock. They are now unable to freely trade it; the app is only allowing users to close out their positions, meaning they can sell it but not buy more. This is potentially devastating for novice investors or those who simply want to follow the general marching orders of the r/WallStreetBets subreddit, which is to hold (and buy more) GameStop stock until further notice.
Over the past week, the stock market has gone haywire as retail investors on the /r/WallStreetBets subreddit decided to buy the stock of the video game retailer GameStop en masse. The idea was that GameStop’s stock was extremely undervalued, and that hedge funds had overextended themselves by betting against it, or “shorting” it. Now that the meme has caught on and been encouraged by Elon Musk (who famously despises short sellers and whose company Tesla is another retail investor darling) GameStop’s stock is worth roughly $350, up from $4 in December. BlackBerry, AMC, and Nokia, other WallStreetBets favorites, are also up.
The result has been chaos for the funds that shorted GameStop, with Melvin Capital needing to call in a multi-billion dollar backstop investment to cover its losses. In response, several large trading platforms temporarily halted trading on the affected stocks. On Wednesday, the New York Stock Exchange halted trading of GameStop and AMC, and Canada’s trading regulator halted BlackBerry. TD Ameritrade restricted users from trading GameStop, AMC, and other stocks, but was not specific about the timeline.
A trading halt is usually implemented to protect investors from volatility or manipulation, usually lasts just a few minutes, and is relatively common. In its announcement on BlackBerry, the Canadian regulator noted that halts are enacted “to ensure a fair and orderly market.” TD Ameritrade, meanwhile, says it restricted trading “out of an abundance of caution amid unprecedented market conditions.”
To many retail investors, these justifications seemed like large platforms running cover for institutional investors being buffeted by the chaos. Chaos, notably, that large institutions often foment and exploit for profit themselves. Indeed, establishment-types are very, very mad at retail investors right now. On Wednesday, Secretary of the Commonwealth of Virginia William Galvin even suggested that platforms should halt trading for an entire month for the affected stocks.
With trading platforms, regulators, and politicians all in the mix now, it seems like the GameStop saga is still far from over.
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