Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

twitter.com

Post reply on HN
Print view View original

581–590 of 1001 posts

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#581

Post by jacobsenscott »

zarkov99 wrote: post #57

Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional market manipulation. We are taking about people commanding titanic amounts of capital and (indirect) regulatory power. Robinhood then had the choice, do we make enemies out of these people or do we just screw, er, I mean protect, our customers? Unburdened by a…

Only a small fraction of RH's customers bought into the fantasy they are fighting some kind of revolution against hedge funds (or that 'the smoking man' paid them a visit in the night...). The vast majority don't care about any of these stocks. Also, by making trading so easy RH has a responsibility to protect amateur investors from making terrible financial decisions. If you really want to buy game stop stock or whatever there are plenty of ways to do so. So they are by no means "screwing" their customers.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#582

Post by wfhpw »

avs733 wrote: post #563
Aunche wrote: post #555

Earlier quoted context omitted.

This narrative doesn't make any sense. Hedge funds aren't a monolithic entity. Some hedge funds lost billions of dollars on shorts. Redditors made millions of dollars. Where do you think the rest of the money went to? That's right, other, more powerful, hedge funds. BlackRock held 9.2 million shares as of a few weeks ago.

not having a RH account, can you trade there on leverage? I imagine if a huge number of retail traders are ending up leveraged to high hell, RH may have ended up in an uncanny financial position because of this.

Then they can enact a moritorium on leverage buys to protect themselves. They have no liability for clients who are buying without leverage.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#583

Post by codecamper »

This is exactly what they should have done immediately when these stocks started to make no sense.

150% moves would be maybe a rough estimate.

Markets need to be protected from manipulation.

Not allowing purchases from robinhood does not punish retail traders more than institutions.

There was NO legitimate reason for the price on these stocks. By limiting purchases they are preventing their clients from getting into a trade that will almost certainly result in losses.

"the short sellers" could very well be other retail investors. I personally shorted GME & AMC when they hit ridiculous prices (I lost money on these trades when they became 2x ridiculous)

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#584

Post by FireBeyond »

alexggordon wrote: post #469
snowwrestler wrote: post #36

Brokers are worried about their legal exposure at this point. They could face lawsuits from investors in Melvin and other hedge funds, who will allege that the brokers knew they were facilitating intentional financial harm. It doesn’t matter if these are likely to fail; they are expensive lawsuits to defend against and therefore may result in settlements. And they could face class action litigation from trial lawyers…

"Intentional financial harm" is not illegal, otherwise shorting stocks would be illegal. There is also no court precedence for normal market maneuvers that happen to have a significantly negative outlook on a company. Imagine if Gamestop sued TD Ameritrade for facilitating short market orders for Goldman Sachs? It would be a joke. Same thing for if Melvin sues--they over exposed themselves and paid for it. There's no…

Good point. Hedge funds pay for things that are ostensibly public, but with very high entry points, to understand the market - witness satellite surveilling of Chinese factory activity, Walmart parking lots, laying private fiber.

WSB was the very definition of public information, open social media.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#585

Post by cft »

zarkov99 wrote: post #57

Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional market manipulation. We are taking about people commanding titanic amounts of capital and (indirect) regulatory power. Robinhood then had the choice, do we make enemies out of these people or do we just screw, er, I mean protect, our customers? Unburdened by a…

All robinhood orders go to Citadel for execution because that is how they make money. Citatel just bailed out Melvin who shorted GME https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi... So the call to Robinhood was probably from Citadel. It's disgusting that instead of saying just this, they hypocritically "protected" their users.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#586

Post by guidovranken »

firebaze wrote: post #554

Even a congresswoman has a quite strong opinion on this: https://web.archive.org/web/20210128155006/https://twitter.c... Unfortunately the tweet has already been deleted. There seems to be quite a lot of pressure.

It's not deleted.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#587

Post by gmm1990 »

throwaway4good wrote: post #569

I am the only one who finds this understandable? Sure short selling sounds weird and dodgy. But how is this different from shilling penny stocks in year 2000? People on Internet forums find stocks that are easy to move for whatever reason; generate hype and price hike and then watch gullable speculators pile in while the core group of manipulators exit their positions.

Yeah I don't understand why so many people are defending a ponzi scheme. Its in at least 90% of Robinhood users interest to not be able to buy GME right now.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#588

Post by fire7000 »

hintymad wrote: post #571
wyldfire wrote: post #26

Can someone help me understand Robinhood's POV? This just seems so outrageous that there must be some sane rationale that I'm not seeing. Why do Robinhood, Reddit, Discord, etc feel like they have to respond to this? Whether the investments being made are responsible or not, it doesn't seem like it should be their place to intervene. If the hedge funds over-shorted GME and WSB recognized that and traded against that…

How is this not making people cynical, even for a person like me who does not own any share of GME? And isn't cynicism one of the greatest dangers to a system, for people stop trusting the system no matter what?

No because the price will normalize in the long run which is the only solid investment strategy. This valuation was created by out of thin air and will disappear into just that. If anything it shows that the market is rife with opportunity where people are overvaluing/undervaluing something

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#589

Post by adjkant »

Worth pointing out that nearly every major trading firm has blocked buying of Gamestop and AMC stock today. I really am hoping to see legal action against the entire industry for literal stock manipulation. This isn't limiting purchasing, it's full-on stopping and only allowing selling. That's insane.
Post reply on HN