Robinhood caves, now allows GameStop stock to continue to trade on its platform; GameStop surges another 36% in after-hour trading
Under heavy pressure from millions of people on social media, the free-trading app Robinhood finally caved. Robinhood issues a statement this evening that it will now allow GameStop stock to continue to trade on its platform. Immediately after the announcement, GameStop surges by another 36% in after-hours trading.
The announcement came shortly after Citadel Securities, a company that reportedly used to route Robinhood’s trading orders, issued a statement denying having anything to do with the decisions to block retail traders in GameStop and other related stocks.
Robinhood is one of the three brokerage firms that banned Redditors from trading GameStop stocks on their platforms. TD Ameritrade and WeBull also restrict the trading of GameStop and AMC stock.
Below is the full statement.
“An Update on Market Volatility
This past year, we’ve seen the financial markets become a voice for the voiceless. We’ve seen a new generation of people come into the markets, sparking conversations about what it means to be an investor. Our customers have shown the world that investing is for everyone—not just institutional investors and hedge funds.
Amid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.
We stand in support of our customers and the freedom of retail investors to shape their own financial future. Democratizing finance has been our guiding star since our earliest days. We will continue to build products that give more people—not fewer—access to our financial system. We’ll keep monitoring market conditions as we look to restore full trading for these securities. We will update this Help Center article with the latest changes.
We are deeply grateful to our customers.”
Meanwhile, GameStop stock surges another 35% during the after-hours trading (screenshot below).