Alexandria Ocasio Cortez Calls Robinhood s Block on Trading GameStop, Other Stocks Unacceptable
On 1/28/21 at 12:54 PM EST
Representative Alexandria Ocasio-Cortez slammed free-stock trading app Robinhood after it restricted trading of GameStock after Wall Street was sent into a frenzy this week. This is unacceptable, the congresswoman tweeted. 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.
On Thursday, Robinhood and other retail brokerages restricted trading in GameStop and other stocks after shares shot up and led to big losses for hedge funds.
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Robinhood Restricts Trading In GameStop, Drawing Criticism From Lawmakers
Robinhood and other major trading platforms on Thursday restricted trading in GameStop and other popular stocks that have skyrocketed this week and triggered anxiety on Wall Street. The decision sparked fierce backlash from smaller investors and lawmakers, questioning the legality of the restrictions.
In a statement, Robinhood said it was restricting transactions for certain securities to position closing only. Other trading platforms, including Investment Brokers and Charles Schwab, took similar steps to restrict trading. It s unclear how long the restrictions on each platform will last.
Smaller investors flocked to a Reddit discussion board, called Wallstreetbets, to encourage users to buy GameStop and other stocks to push prices up higher. In the past month, GameStop shares rose nearly 2,000%. But several hours after the Robinhood announcement, GameStop s shares were down 30%.
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After the stock market closed on Wednesday, there was a good deal of celebrating at r/WallStreetBets, the Reddit message board favored by small investors who have been bidding up the shares of GameStop, a video-game retailer that has been hit hard by the coronavirus pandemic. A couple of weeks ago, the stock was trading below twenty dollars. It’s been rising sharply since, and on Wednesday it shot up more than a hundred per cent, to close at $347.51 on news that a number of short sellers Wall Street traders who bet on stock prices falling had closed out their negative wagers and suffered big losses. “Tards this is bigger than all of us. Once we’re done with GME” the stock symbol for GameStop “we take down the whole fuxking Wallstreet! Get Fxked!,” one Reddit user wrote, employing a shorter version of the derogatory label that many Reddit contributors apply to themselves ironically. Another wrote, “Market is closed guys, get some fresh air an