Robinhood and GameStop route popular fury against Wall Street
When Robinhood stopped retail investors from buying more GameStop shares in their battle with the hedge fund short-sellers, it put itself squarely in their sights.
After the furious divisions that followed the US presidential election in November, it is heartening to see a new spirit of unity among the country’s political class.
Ted Cruz, a Republican senator from Texas, and Alexandria Ocasio-Cortez (AOC), a Democrat representative from New York, can come together on the big issue of the day.
It is, they both agree, unacceptable that the Robinhood trading app should prevent retail investors from buying additional GameStop shares and driving up the price even further, breaking some more hedge funds in the process, but giving the rest of us our daily entertainment.
Reddit’s WallStreetBets crowd had only just got going, having driven the video game retailer’s stock from $17.25 at the start of January to $347.50 on January 27. Robinhood paused the game on Thursday, though it was set to resume limited buying on Friday.
The pressure is now mounting for the SEC to do something before … Gary Gensler takes office
By the time the app had limited purchases on GameStop and several other names, the Reddit buyers had already moved onto other shares also heavily shorted by the hedge funds, making the latter tremble at the losses they might suffer.