Robinhood Clamps Down Again: GameStop Buys Limited As Stock Soars - Forbes

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Topline

Robinhood enacted new, tighter restrictions on buying GameStop shares and expanded its list of restricted stocks, again frustrating retail traders after allowing limited trading of meme stocks to resume Friday morning.

Key Facts

Robinhood is now allowing only one share buy for GameStop, after allowing five earlier in the trading day Friday.

Just before the market closed, Robinhood reduced buying ability to one share of 36 different securities, including blue-chip stocks like GM and Starbucks.

In all, the online brokerage expanded the list of securities it was restricting Friday from 13 to 50 just before the market closed.

GameStop and AMC (also limited to one share buy), which are the most popular stocks among redditors, were both up well over 50% on the day Friday afternoon even as the market as a whole is down.

Other securities restricted were: American Airlines, Aurora Cannabis, First Majestic Silver, AMD, BlackBerry, Bed Bath and Beyond, BYD Company, Beyond Meat, Churchill Capital, Clover Health Investments, Curis, Castor Maritime, Express, EZGO Technologies, Gran Tierra Energy, Hims and Hers Health, Inovio, Social Capital Hedosophia V, Social Capital Hedosphia H, Jaguar Health, Koss, Lianluo, Moderna, McEwen Mining, Naked Brand, The9, Nokia, Novavax, Opendoor Technologies, Rocket Companies, RLX Technology, Rolls-Royce, Shoals Technologies Group, Siebert Financial, iShares Silver Trust, Sundial Growers, Direxion Daily Semiconductor Bull ETF, Sorrento Therapeutics, Star Peak Energy Transition, Tengasco, Tian Ruixiang, Tootsie Roll, Trivago, Workhorse, Qualtrics International and Zoom.

Key Background

Robinhood came under intense criticism Thursday for preventing users from buying any more shares of GameStop, which has surged massively thanks to an army of redditors at r/WallStreetBets who have continued to drive up the stock after hedge fund managers shorted the stock, betting it would continue what had been a steady price decline. Angered retail traders retaliated by pummeling the app with one-star reviews on the Google Play app store and filing a class-action lawsuit in New York. Lawmakers on both sides of the aisle have suggested there may need to be an investigation into Robinhood’s tactics.

Crucial Quote

“It pains us to have had to impose these restrictions, and we’re going to do what we can to enable trading in these stocks as soon as we can,” Robinhood CEO Vlad Tenev said Thursday. Tenev claimed shutting down GameStop buys was the “correct” decision because of a lack of cash on hand on the part of Robinhood.