Users of the popular stock-trading app Robinhood expressed outrage on Thursday after the platform abruptly stopped allowing the purchase of high-flying stocks like GameStop and AMC Entertainment Holdings.
Charles Schwab and Interactive Brokers also clamped down on the mostly amateur traders who have driven the price of so-called meme stocks to stratospheric heights in recent days. Robinhood users pushed back on social media, decrying the actions as “rigged” and “complete bullshit.”
“The free market is only free until rich people lose money,” one tweeted.
Others called it “market manipulation” and urged investors to hold onto their shares.
GameStop has been a focus of the Reddit-driven uprising, with people on the r/WallStreetBets subreddit banding together to hype the stock and purchase it in droves. The shares soared, impacting bets by hedge funders that the video game chain’s shares would fall, and locked in massive losses. At least one hedge fund needed a bailout. The frenzy has boosted GameStop’s market value $10 billion in recent weeks and revealed once again the casino culture that powers the financial industry.
Shares of GameStop and AMC Entertainment continued their gyrations Thursday. GameStop dropped as much as 64%, triggering a trading halt for volatility. AMC dived 61%.
Earlier, Robinhood posted a blog notice.
“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 wrote.
Robinhood also emailed customers a note that appeared to offer advice on how to be “an informed investor.”
People on the r/WallStreetBets subreddit also have driven wild increases in the stock prices of other companies ― including AMC, BlackBerry, Nokia and the started-as-a-joke cryptocurrency Dogecoin.
While investors can choose from a multitude of brokerages, the easy-to-use Robinhood app is appealing to casual traders and new investors. It has grown popular on TikTok and helped proliferate an entire genre on the app called StockTok.
Robinhood did not respond to HuffPost’s request for comment on the move to stop buyers from purchasing certain stocks.
Other brokerages also took steps to calm the frenzy. “In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME, $AMC and other securities,” TD Ameritrade told MarketWatch on Wednesday.
Robinhood’s blog post about restricting GME and other stocks offers exactly zero justification for that action. That’s a yikes from me. https://t.co/1UHN3JgyPt
— Alex Fitzpatrick (@AlexJamesFitz) January 28, 2021
I have no skin in the game and think a lot of people were going to lose money from the irrationality around GME, AMC and meme stocks.
But… what Wall Street has done this morning (RobinHood banning new positions, the markets seemingly suspending stock) is complete bullshit.
— Can Okar (@canokar) January 28, 2021
You can no longer buy GameStop stock on Robinhood. Ditto Nokia, AMC, and all the other stocks that had been shorted.
The free market is only free until rich people lose money.
— Yvette, exiled Queen of the Seychelles. (@TheSciBabe) January 28, 2021
Disappointed in @RobinhoodApp
It’s okay when institutions pressure prices, but not us. Weak.
What other options are out there?
— swiftor (@Swiftor) January 28, 2021
The team at @RobinhoodApp showing us all that capitalism and free markets only really exist for hedge fund managers in 2021. App deleted.
— James Kosur (@JamesKosur) January 28, 2021
Many on Twitter urged people to hang onto their investments.
Do not sell. This is market manipulation. And if it’s war they want, it’s war they shall get.
— Bridget Phetasy (@BridgetPhetasy) January 28, 2021