Robinhood’s (a free brokerage firm) recent trading restrictions enraged amateur traders, veteran economist, politicians and a few celebrities. GameStop’s shares jumped 400% last week closing out the first month of 2021 1,625% in the green. The sudden surge caused a wave of effects which included Reddit tripling it’s members to 6.5 million in one week. The GameStop chaos upended Wall Street and seemed to negatively affect Robinhood’s bottom line which resulted in the broker accessing credit lines and seemingly throttling trades.
Robinhood released a statement on Saturday attempting to clarify their restrictions on skyrocketing stocks.
“With the extraordinary market activity this week, and the temporary restrictions we put in place on certain securities, we’ve received questions about how Robinhood works, trading, clearing and settlement and clearinghouses.” They went on to say “the amount required by clearinghouses to cover the settlement period of some securities rose tremendously this week. How much? To put it in perspective, this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten fold. And that’s what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on. It was not because we wanted to stop people from buying these stocks. We did this because the required amount we had to deposit with the clearinghouse was so large-with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements-that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements.”
Financially savvy individuals and stock newbies both cried foul against Robinhood and Slim Thug has decided to give his two cents referencing the monetary melee.
The “How to Survive in a Recession” author and King rapper surfaced on social media saying “the mother****ers just proved that they don’t want a poor mother****er to get rich if you got any kind of brain” he went on to say “GameStop was a prime example.” He continued “AFC GameStop that proves to you that these **********ers do not want you to rise up and get that check. Like they say America is the land of opportunity no its not it’s a land of m****rf****ers who old and rich who passing that s**t down and staying on top with no talent. They already had bread so they own this sh*t they daddy died grandpa died that’s what America is. It’s not the land of opportunity.”
Many were disgusted by Robinhood’s actions which demonstrated Capitalism in organic form and at the very least oppression of already struggling Americans.
Are you chucking Robinhood the deuces or just diversifying your investments (property, health, ETF’s, Bitcoin, family) until unrestricted trading resumes?