Robinhood backlash: What you should know about the GameStop stock controversy. Amid the meteoric rise in GameStop shares, short sellers have suffered nearly $20 billion in losses this month. Robinhood ignited a firestorm last month when the free trading app suspended purchases of GameStop, AMC and other stocks that were sent to the moon by an army of traders on Reddit… Robinhood, Citadel, Reddit Executives Testify at GameStop Hearing Photographer: Tiffany Hagler-Geard/Bloomberg Thu Feb 18 2021 17:00:00 GMT+0000 (Coordinated Universal Time) The stock trading app Robinhood made headlines this year with the Gamestop meme stock fiasco, a Reddit-born scheme to punish short-sellers and make a … The squeeze game began to intensfiy. Seemingly driven by both irony and a resentment toward the balance of power on Wall Street (which is traditionally dominated by large hedge funds), the Redditors dramatically upset trading norms, forcing at least one hedge fund to seek a bailout and the popular trading app Robinhood to restrict trading on GameStop’s stock. Since its founding in 2013, Robinhood has been steadily growing its customer base, gaining 13 million users by the end of 2020. GameStop, Reddit, and Hedge Funds, Explained. A source on Capitol Hill says House Financial Services is getting flooded with calls about GameStop and Robinhood by Reddit users who tracked … Press J to jump to the feed. Got a confidential news tip? The filing comes as a bold move for the company after its rough start to the year, but perhaps it is its way of bouncing back from the bad press, and capitalizing on its enormous surge in usage—an additional 6 million in the first two months of 2021. The speculative stocks gave back a chunk of their gains after Robinhood tightened restrictions throughout the day, only allowing clients to buy only a single share of GameStop. GameStop | 96,033 followers on LinkedIn. Getty Images For a while, the little guy was on a roll. Reddit, Robinhood and hedge fund CEOs testify at House hearing on GameStop saga originally appeared on abcnews.go.com. "The fact that more people are interested in the market and more people are thinking about investing is a good thing," said Michael Katz, partner at Seven Points Capital. A demonstrator holds up a placard saying Robin Crook in front of the New York Stock Exchange, January 28, 2021. The move came only days after Robinhood rolled back restrictions on purchases of both stocks, when traders could buy up to 100 shares of video-game retailer GameStop and 1,250 of movie theater chain AMC. "In order to protect the firm and protect our customers we had to limit buying in these stocks," Tenev told CNBC. The rally backfired on Robinhood, the free-trading pioneer and popular app. Robinhood CEO Vlad Tenev came on CNBC Thursday night to say that it took those unusual actions so the broker could continue to meet rising deposit requirements and denied it was because of any liquidity issues. The company has selected Nasdaq to list its shares on and has filed confidentially with the US Securities and Exchange Commission (SEC). I would guess they are hemorrhaging users right now and are in a big hurry to squeeze some value from the company before it's completely worthless. By mid-week, everyone was talking about GameStop. Gill and his fellow Reddit users flocked to the free online trading platform Robinhood to buy up GameStop stock before turning their sights onto other floundering companies favored by … By Reuters Feb 18, 2021 Tesla CEO Musk also chimed in on the phenomenon on Twitter and linked to the WallStreetBets message board. The extreme volume in the name also started to raise eyebrows. The reckless retail buying frenzy drew attention from high-profile investors including Elon Musk and Chamath Palihapitiya as well as a slew of lawmakers calling on regulators to intervene. By ... known as Roaring Kitty from his YouTube videos and Reddit posts, bought GameStop and touted it on Reddit… Other established startups, like Airbnb, Lyft, Slack and Palantir, have also filed IPOs confidentially—allowing them to keep their financial details private for the time being. Robinhood announced that it has confidentially filed for an initial public offering (IPO), on Tuesday. Data is a real-time snapshot *Data is delayed at least 15 minutes. Add to that the major outflow in users, the fact that competitors are now matching their offerings, and thier ongoing customer service / PR problems. Around 7% of people who bought viral stocks invested between $1,001 and $5,000 … In this video Patrick Bet-David reacts to the current madness going on with GameStop, Robinhood and the Reddit Drama. Welcome to /r/StockMarket! The Reddit forum also briefly went private Wednesday evening as the moderators said they were "unable to ensure Reddit's content policy.". For a stock rising 100% and falling 40% in single sessions, two days becomes a much riskier time period and more collateral is demanded according to the clearinghouse rules. Take the home run. The investing app is a favorite among everyday traders who congregate in online forums like Reddit’s r/WallStreetBets and sent GameStop and AMC stock soaring earlier this year — and sunk the short-sellers betting against it.. © 2021 CNBC LLC. Hedge funds, Robinhood face grilling by Congress over GameStop Reddit rally. Robinhood on Thursday restricted trading of GameStop, AMC, BlackBerry, and other stocks. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. One top post Monday said "IM NOT SELLING THIS UNTIL AT LEAST $1000+ GME.". If you are at all interested in investing, you’ve almost certainly heard of Robinhood. Robinhood Now Faces Over 30 Class-Action Lawsuits for Blocking Stock Buys. The chief executives of Reddit, Robinhood, Citadel and Melvin Capital, along with the Reddit poster who spearheaded the GameStop buying frenzy, were all in … CNBC's Andrew Ross Sorkin reported that Melvin Capital closed out its short position in the stock on Tuesday afternoon after taking a huge loss. GameStop dropped 44% on Thursday, falling for the first time in six days as Robinhood and Interactive Brokers limited trading in several of the heavily shorted names to closing positions only, meaning that traders could not buy up shares as the prices fell. The struggling game retailer is a popular short target on Wall Street. Days after Robinhood restricted stock buys for GameStop, users across … Other brokers too hiked margin requirements. Robinhood announced that it has confidentially filed for an initial public offering (IPO), on Tuesday. "Don't go for the grand slam. A pair of federal lawsuits were filed on Thursday, blaming the trading platform for alleged market manipulation, Law and Crime reported. The company’s flurry of new customers has definitely gotten the attention of Wall Street lately, with its valuation rising from $12 billion in September 2020 to $20 billion by the end of the year, and then doubling to $40 billion in February 2021. Rep. Alexandria Ocasio-Cortez weighed in on Twitter, calling Robinhood's new parameters "unacceptable.". The chief executives of Reddit, Robinhood, Citadel and Melvin Capital, along with the Reddit poster who spearheaded the GameStop buying frenzy, were all in … The entire GameStop/Robinhood/Reddit saga is an extreme example of this kind of profit approach. The retail investors on Reddit who caused GameStop’s stock to skyrocket in January made their investment decisions based on publicly available and correct information, Pierce explained. The House Finance Committee holds a hearing titled "Game Stopped? The median investment, according to the survey, was $150. ... help Reddit App Reddit coins Reddit premium Reddit gifts. Get this delivered to your inbox, and more info about our products and services. The bad press and the outflow will show soon in reports, so it's better to get ahead of those. We want to hear from you. On Thursday, Robinhood … Most on Wall Street agree the GameStop trade will soon end very badly for the retail traders who are still long. The (Reverse) Robinhood Maneuver. GameStop (NYSE: GME) stock is taking a beating on Wednesday after announcing an at-the-market (ATM) program that confused some retail investors over on Reddit. House GameStop Hearing Delves Into Robinhood, Reddit And WallStreetBets. GameStop stock surged 400% in the last week — Here's how the stock's wild week played out. The U.S. House Financial Services Committee held a hearing concerning Robinhood and Gamestop today. The young broker that wants to go public this year had to tap credit lines, raise new funds and throttle back trading in a list of the short-squeeze names. A band of amateur traders in WallStreetBets forum, whose members have tripled to 6.5 million in just a week, aimed to bid up heavily shorted stocks "to the moon," creating massive short squeezes that some believe caused a turmoil in the broader market. Posts about equities, options, forex, futures, analyst upgrades & downgrades, technical and fundamental analysis, and the stock market in general are all welcome. Robinhood’s users blamed the brokerage for suspending the trading of GameStop stock and other securities last month, amid a buying frenzy kick-started by retail traders on a Reddit forum. GAMESTOP and AMC shares plummeted on Thursday after Robinhood and WeBull blocked "Reddit rally" as politicians slammed the move to help Wall Street. One trending post featured a screenshot of the user's brokerage account with an over 1,000% return on the stock. GameStop, which had doubled in earlier trading Friday, traded off its highs. Other speculative names with high levels of short interest, including AMC Entertainment, Blackberry and Bed Bath & Beyond also dropped sharply. Like Robinhood CEO Vladimir Tenev, Griffin also plans to make a case for shortened equities settlement cycles. Shares of GameStop surged to nearly $150 on Tuesday. The Securities and Exchange Commission said Friday it is reviewing recent trading volatility that has led to a meteoric rise in GameStop and AMC. A Division of NBCUniversal. Robinhood raised $1 billion from existing investors just hours after it halted purchases of GameStop, suggesting the free-trading app faced a potential cash shortage. Robinhood raised $1 billion overnight from investors and taps credit lines to ensure it can meet those requirements. It also drew the scrutiny of political officials from both sides of the aisle. Republican Senator Ted Cruz tweeted "fully agree" in response to Ocasio-Cortez. Gill ended his opening remarks by saying he remains "bullish" on GameStop stock. Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide." You've already won," Cramer said. This clearinghouse ensures orderly settlement of trades, a process that takes two days. John Lamparski | SOPA Images | Sipa USA via AP Images, Robinhood CEO on decision to restrict trading on GameStop, 'You've won' — Cramer tells investors to take home run and sell GameStop, Melvin Capital closed out its short position, implored GameStop holders to take profits, The Securities and Exchange Commission said Friday, will soon end very badly for the retail traders. The stock eventually closed 18% higher after multiple trading halts throughout the day. Although the saga created a ton of free publicity for the zero-commission trading app, the company also came under fire from Congress for limiting its trades. The California-based upstart pioneered zero-commission stock trading and disrupted the old-school industry of brokerage platforms like Charles Schwab, E-Trade, and Fidelity with its gamified approach to trading. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world. "We will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity," the SEC said in a release. "We did this because the required amount we had to deposit with the clearinghouse was so large—with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements—that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements.".

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