"Robinhood got about 40% of their revenues from one of the hedge funds that just took a dive on Gamestop. Highly recommend an investigation. This smells like collusion to protect the rich insiders."
Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
611–620 of 1001 posts
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#612Apparantly they're letting people close out their position, but how are you supposed to do that when no one can buy it from you?
Simple, the hedge funds can buy it from you at a steep discount, that way the can close their short positions for massive profit.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#613I don't want to sound too dramatic, but that is the beginning of the end for robinhood. Why would you use it after this ?
Schwab, Fidelity, and others now offer free trades on equities and ETF’s, so if that’s all you’re doing, there’s no reason to stay. That said, RH still has the best fee for options trading ($0.00 vs $.65 for Schwab/Fidelity).
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#614As I understand it, the hedge funds had naked shorts. That's illegal. If they did, what is happening to them serves them right. Even if they didn't, a "short squeeze" is perfectly legal. If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. This is not a "pump a…
There is no evidence to indicate they had naked shorts. They were most likely short, but not naked short.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#615Hedge funds made millions off this move by Robinhood. As soon as this information became known - and they would be the first to know about since they would've game planned this out - they would've loaded up on put options and front-run retail investors who were getting stopped out of their position due to cascading liquidations. What a tremendous transfer of wealth from retail to institutions that we witnessed today.
It's fairly interesting to see the cultural response to this, and it doesn't seem to divide down the usual left/right political lines which is a relief after years of constant fighting. I wonder if this might be a driver of more political harmony in the coming months.
I also wonder how much of all this is due to a social media vacuum created by the end of Trump's tenure and his removal from social media. The timing of this GME episode lines up pretty well with that hypothesis.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#616Even 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.
It _was_ deleted. Maybe she undid it in the meantime.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#617If they were just blocking margin trading or trades with unlimited risk that would be one thing. But this smacks of either paternalism or trying to manipulate the market. I hope they lose a lot of customers (or product depending on your POV).
They have blocked 7/10 most mentioned stocks in r/wallstreetbets from being purchased. It isn't just Robinhood, also Revolut and others. Then they launched a short attack, with nobody willing to buy besides themselves, they tanked the stock.
It doesn't get more obvious than this.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#61899.99% (or more) of people who buy lotteries, lose ALL their money. However, government allows anyone to buy them. There is no meaningful restriction for an assured destruction of wealth for most of those who buy them. While this GME/AMC run will not end well for many people, restricting people from buying those stocks - whether it is through actions of trading platforms or governing agencies - smacks not just of pat…
It's basically corruption and shows why we need free markets and why it is a problem that exchanges are private companies.
what
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#619As I understand it, the hedge funds had naked shorts. That's illegal. If they did, what is happening to them serves them right. Even if they didn't, a "short squeeze" is perfectly legal. If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. This is not a "pump a…
> If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. I don't think it's really a case of people disagreeing on the real value of GameStop stock. Framing it like this ignores important facts. This stock was trading around $4 in August, around $20 in the beginn…
> But no way anyone sincerely believes GameStop is worth $400/share.
In February 1997 AAPL was worth 15 cents per share. You could have overpaid by 100x at the time and you'd still be up 9.4x after 24 years (not counting dividends), which is an annualized gain of almost 10%.
Maybe Ryan Cohen taking a big stake in Gamestop is their Steve Jobs moment, who knows?
Disclosure: long GME
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#62099.99% (or more) of people who buy lotteries, lose ALL their money. However, government allows anyone to buy them. There is no meaningful restriction for an assured destruction of wealth for most of those who buy them. While this GME/AMC run will not end well for many people, restricting people from buying those stocks - whether it is through actions of trading platforms or governing agencies - smacks not just of pat…
I agree with you. But it is also much higher friction to invest large sums in lotteries. Casinos feel the more apt analogy.