Free-trading app Robinhood halts trading of GameStop stock as Reddit investing frenzy spreads around the world
In what many are calling market manipulation, the free-trading app Robinhood just halted the trading of GameStop stocks on its platform. The fintech startup unlisted the stock and several others. People are angry and retail investors are crying foul.
According to this morning announcement, millions of Robinhood customers can no longer buy Gamestop stock on the free-trading app, thereby blocking 2.8 million members of the WallStreetBets forum on Reddit. Robinhood also said it aims to do the same for AMC, Nokia, BlackBerry, Naked Brands, and a few other stocks
In making the move, Robinhood emailed customers warning of “the current volatile market conditions.” The notice stated, “It’s as important as ever to be an informed investor,” and included links to its investment resources. As TMZ puts it:
Of course, this has infuriated customers who believe this is market manipulation favoring the hedge funds that have shorted stocks like GameStop… and hurting retail investors who are backing them.
As another person on Twitter put it …”The free market is only free until rich people lose money.”
Meanwhile, as millions of retail investors are flocking to battered stocks such as GameStop and Bed Bath & Beyond, the phenomenon now appears to be spreading overseas. According to CNBC, on Wednesday, Finnish telecoms firm Nokia got pulled into the frenzied market activity as its U.S.-listed shares spiked as much as 40%. On Thursday, they were down around 13% in premarket trading, while the company’s Finland-listed shares were 5% higher.
Yesterday, Trading 212, a London-based firm, warned of disruption to its service due to an “unprecedented increase in demand.” The platform informed users Thursday that it was halting deals in GameStop and AMC, another stock featured on r/WallStreetBets, “as highly unusual volumes have led to an unprecedented market environment.”
In a tweet this morning, Trading 212 said it had temporarily stopped onboarding new clients due to “unprecedented demand.”
Due to the unprecedented demand, we have temporarily stopped onboarding new clients. Once we process the existing queue, we will be open for new registrations.
— Trading 212 (@Trading212) January 28, 2021
As we reported, the stock price of the flailing video game chain has gone from $2.80 on April 3 to $344.27 as of yesterday. The stock went as high as $500 during pre-market trading. The Reddit Army has been encouraging each other to pile on GameStop and other similar stocks and keep pushing the stock higher and defeat the hedge fund firms.