Wall Street has taken over the past two days since Reddit users have acquired large quantities of GameStop shares to damage hedge funds that benefit short the normal falling stock. Most of the GameStop trading was carried out in Robinhood, a free app that makes it possible for people to trade small quantities of stocks. However, Robinhood chose on Thursday to betray the identity and avoid shopping for the GameStop stock and the stock of other iconic companies.
Robinhood said in a Thursday blog post that it would not allow purchases of Gamestop, AMC, BlackBerry, Bed Bath, and Beyond, Koss and Nokia headphones, and also Naked Brands that were hit in the shutdown after a Wednesday direct bidding campaign after “recent volatility,”. Robinhood has also increased margin requirements on such securities, which means that consumers would pay more money to purchase the securities, which is apparently more money for those who have more cash. The margin criteria for GameStop inventories also increased on Wednesday by TD Ameritrade and Charles Schwab.
The decision was framed by Robinhood in his blog post as a way to “help our customers navigate this uncertainty” In the meantime, the Verge noticed that Melvin Capital Management, which another hedge fund, Citadel, has since rescued, was suffering from the GameStop increase. Citadel’s founder is Ken Griffin, who is a major Robinhood investor with TD Ameritrade and Charles Schwab, and also created a Citadel Securities company.
Although Robinhood’s everyday users could not transact these newly booming inventories, with a wave of one-stard Google app store ratings, they could take revenge against the app.