Robinhood, Interactive Brokers, and WeBull Financial shut down the buying feature for shares of GameStop (GME) and other hot stocks on its app Thursday after a wild week of trading: GameStop stock was $65 at Friday’s close, rocketing to $347 at Wednesday's close, a 437% gain.
“We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only,” the company wrote in a blog post.
Other platforms have been rumored to have placed restrictions, though traffic and trading halts have also stymied traders.
Robinhood also shut down buying of AMC (AMC), BlackBerry (BB), Bed Bath and Beyond (BBBY), Express (EXPR), Koss (KOSS), Naked Brand Corp (NAKD) and Nokia (NOK). Users can only liquidate or close positions.
The GameStop stocks’ run was originally popularized by Reddit forum Wall Street Bets as a value investment.
Throughout social media, angry users reported the inability to buy the stock — only to sell. Barstool Sports’ Dave Portnoy, who became a popular trader as the pandemic shuttered sports and fans turned to the markets, chimed in as well.
“Either @RobinhoodApp allows free trading like they say they do or they die. It’s really that simple,” Portnoy tweeted. Searches for AMC Entertainment (AMC) on the app also came up blank. (AMC, BlackBerry (BB), Nokia (NOK), and other stocks were among those that have gotten huge boosts from the Reddit forum.)
— Dave Portnoy (@stoolpresidente) January 28, 2021
Robinhood isn’t the only trading platform that has disabled buying certain stocks, though its populist “democratizing investing” image it cultivates invited more anger at what users see as hypocrisy.
Let the people trade.
— Robinhood (@RobinhoodApp) March 23, 2016
In a tweet, Interactive Brokers, another broker, announced it was putting a basket of stock options popular with the forum on “liquidation only,” meaning users can only sell.
“Interactive Brokers has put AMC, BB, EXPR, GME, and KOSS option trading into liquidation only due to the extraordinary volatility in the markets,” the company tweeted. “In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice.”
Interactive Brokers has put AMC, BB, EXPR, GME, and KOSS option trading into liquidation only due to the extraordinary volatility in the markets. In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice.
— Interactive Brokers (@IBKR) January 28, 2021
GameStop is up over 1,900% year-to-date, and some are concerned that Robinhood’s delisting of the stock puts a finger on the scale against those betting it will go up.
The wild trading volume (almost 200 million shares were traded on Jan. 22; 25 million is typical) and record-breaking options calls and a narrative of “retail investor versus hedge fund” catapulted the Reddit traders into mainstream news media (including a front-page story in the New York Times).
Robinhood is closing 1/29 calls for GME and AMC and not taking new ones. pic.twitter.com/LCNpPrIE9L
— Matthew Panzarino (@panzer) January 28, 2021
On Wednesday, CEO Vlad Tenev told Yahoo Finance that retail investors were tired of being talked down to by the financial establishment, but received some flak on Twitter and across message boards for selling order flow, a key way the company makes money and provides free trades to its more than 13 million users (as of December; that number has doubtless exploded).