Stock trading app Robinhood began restricting transactions on certain stocks Thursday, following days of recent surges from GameStop and others.
“We continuously monitor the markets and make changes where necessary. 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,” the company said in a blog.
Amid significant market volatility, “it’s important as ever that we help customers stay informed,” Robinhood also said.
In light of current market volatility, we are restricting transactions for certain securities to position closing only, including $AMC and $GME. Read more here.https://t.co/CdJMjGAeFH
— Robinhood (@RobinhoodApp) January 28, 2021
Stocks being restricted include GameStop, AMC Entertainment, BlackBerry, Express and Nokia, among others.
Interactive Brokers, Charles Schwab and TD Ameritrade took steps to restrict or limit trading of certain stocks, as well.
In the past week, “meme stocks” — like GameStop, AMC and others — have been spurred by pushes from Reddit users. These “meme stocks” have become targets of online retail investors that have sent their shares skyrocketing even as big hedge funds bet they will fall, according to the Associated Press.
GameStop opened at $265 a share Thursday and reached a high of $482.85. It closed at $193.60 a share.
Many reacted to the moves made by Robinhood, including “Shark Tank” star and Pittsburgh native Mark Cuban, U.S Rep. Alexandria Ocasio-Cortez (D-N.Y.), Barstool Sports’ Dave Portnoy and others.
So are @robinhoodapp and @IBKR ending trading in #wallstreetbets stocks because they are losing their ass on these trades ? Or maybe they dont have the cash to enable the trades at this scale ? Anyone have any insight on their economics ?
— Mark Cuban (@mcuban) January 28, 2021
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
— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
Either @RobinhoodApp allows free trading or it’s the end of Robinhood. Period.
— Dave Portnoy (@stoolpresidente) January 28, 2021
GameStop stock has rocketed from below $20 earlier this month to more than $400 Thursday as a volunteer army of investors on social media challenged big institutions who had placed market bets that the stock would fall.
Some big institutions such as Citron Research and Melvin Capital had placed bets that GameStop shares would fall as the company tries to transform itself from a bricks and mortar retailer to a seller of online video games.
But smaller investors rallied to the stock. By sending the stock soaring higher, they forced the big players to cover their bets by buying the stock, increasing the stock even further.
The Associated Press contributed to this report.
