Robinhood, the popular trading app has announced the delisting of popular Gamestop (GME) stocks after restricting its trade yesterday to sell only. The decision received heavy backlash from everyone especially the crypto community.
— Frederick Joseph (@FredTJoseph) January 28, 2021
Robinhood trading app also faced multiple outages yesterday owing to the surge in price and high trading volume on the spot and heavy liquidation of short positions, at one point more than $13 billion.
— CNBC (@CNBC) January 28, 2021
Gamestop stocks have become the talk of the town post its price surge yesterday over $300 which was largely pushed by a Reddit group wallstreetbets in what eventually turned into retail vs banker trade battle.
Nasdaq came to many short buyers’ rescue when it halted the trade of GME tokens calling it a manipulation owing to its social media hype. Robinhood followed the suite and halted all buy trades for spot and options.
AOC and Ted Cruz Calls For Investigation Into Robinhood Blocking GME Trading
Robinhood has got itself into hot waters that might lead up to its closure as the demands for criminal action lawsuit against the trading app has caught the attention of US Congresswoman Alexandria Ocasio-Cortez who called for an investigation into the trading app for blocking GME stocks trade at the peak of its price for retail investors while hedge funds can still trade it freely without any restrictions.
This is unacceptable.
We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
The Congresswoman went onto the point that the investigation won’t be limited to Robinhood and would include other exchanges following a similar practice.
Inquiries into freezes should not be limited solely to Robinhood.
This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations – especially those allowing sales, but freezing purchases.
The congresswoman call for an investigation into Robinhood and other exchanges resorting to the blocking of GameStop trade has also resulted in a very rare moment when Republican Senator Ted Cruz agreed with AOC to pull up Wall Street for dictating terms over retailers.
Fully agree. ???? https://t.co/rW38zfLYGh
— Ted Cruz (@tedcruz) January 28, 2021
Robinhood Draws Heavy Backlash Amid Calls For Decentralization
The decision by the robinhood trading app didn’t go down well with many especially the crypto community who were rooting for Gamestop to liquidate more short positions. The delisting and halting of trade also rose the demands for a more decentralized platform where it is not driven by a monopoly of a few at the top.
YOLO – the world belongs to the new age.. it's time to adjust.
— SONM (@sonmdevelopment) January 28, 2021
The crypto community was rallying behind GME as it shares a similar belief of shorting the bankers and was already calling for the company to invest in bitcoin and list their stocks on crypto exchanges via tokenization.
Many believe that Wall Street has resorted to bullying tactics as they are losing the trade game against retailers.
the fact that the wealthy are doing everything in their power to pressure robinhood and other apps to cease purchases of stock in GME AMC etc. just goes to show that they're scared of what we're collectively capable of. im gonna do my best to keep holding however long i can
— Michael Kovach (@kovox) January 28, 2021
All eyes are now on Gamestop to see what they do next with multiple trading platforms resorting to halt their stock trades as well as delist them.