8/17/2023 0 Comments Robinhood blocks gameAccording to GeekWire, she stated, “All of us got screwed in the Recession. Her tweet criticizing Robinhood’s restrictions has generated over 150,000 retweets since Thursday, as well as agreement from infamous republican rival, Senator Ted Cruz.ĪOC appeared on TheStockGuy podcast via Twitch Thursday evening, and spoke with Reddit co-founder Alexis Ohanian. The Democratic Congresswoman has been outspoken about a need for investigation, and possible regulation, of the hedge funds, short-sellers, and the stock-trading platforms that froze retail sellers’ capabilities to buy a list of stocks that include GameStop, AMC, Express, Nokia, and Bed, Bath & Beyond. See: Wall Street Is Extremely Volatile Right Now – How Safe Is Your 401K? In fact, the hedge fund is Robinhood’s biggest customer.Ĭitadel issued a statement noting, “Citadel is not involved in, or responsible for, any retail brokers’ decision to stop trading in any way…Citadel Securities has not instructed or otherwise caused any brokerage firm to stop, suspend, or limit trading or otherwise refuse to do business.” Rumors circulated that Citadel owned stock trading platform Robinhood, which notoriously shut retail traders out of buying GameStop stock Thursday. Citadel was founded by Harvard graduate Ken Griffin, who is also the firm’s CEO and Co-Chief Investment Officer (Co-CIO). Global multistrategy hedge fund Citadel, with $25 billion in investment capital just last week, was one of the hedge funds that helped bail out Melvin Capital. Melvin Capital received an infusion of money from other hedge funds to avoid bankruptcy. Markets Insider reported that GameStop short sellers (i.e., hedge funds like Melvin Capital) have lost as much as $19 billion this year. Melvin Capital announced on Tuesday that it had closed its short position on GameStop, but not before the $13 billion hedge fund lost undisclosed amounts. Gabe Plotkin founded the firm in 2014, after gaining experience as a top trader at Steve Cohen’s SAC Capital hedge fund, which was shut down following insider trading allegations in 2016. Hedge fund Melvin Capital is amongst the most notorious for shorting GameStop, losing billions. Learn: Robinhood Backtracks, Says It Will Allow ‘Limited Buys’ of GameStop and Others – What’s Really Going On? “In order to protect the firm and protect our customers we had to limit buying in these stocks,” he told CNBC, though he insisted that “there was no liquidity problem.” On Friday, the blog “Guest of a Guest” referred to Robinhood CEO Vlad Tenev as “the most hated man in America” for the restrictions he chose to impose on retail traders this week. On Thursday, Robinhood reportedly tapped credit lines and even allegedly borrowed millions from JPMorgan Chase and Goldman Sachs to cover trading. It’s important to note that Citadel Trading, who bailed out hedge fund Melvin Capital, is one of Robinhood’s biggest investors. Many r/WallStreetBets members and other retail investors used Robinhood to jump on GameStop, AMC and other stocks before they started to rise and fall in ways never before imagined.īut on Thursday, in the midst of retail trader wins on rising GameStop shares, Robinhood shut down sales of GameStop and other stocks. Robinhood has promoted itself as the retail stock trading app that encourages “investing for everyone,” with commission-free trades. ![]() Cohen clearly understands how to convert retail business models into successful e-commerce companies. ![]() In 2017, Cohen sold the company to pet supply retailer PetSmart for a staggering $3.35 billion.Īlso according to Bloomberg, his stake in the company has soared to over $1 billion this week, though with the stock’s price swinging up and down by the minute, that number is changing in real time. Many attribute the stock’s rise to Cohen’s presence, according to Bloomberg – after he purchased Chewy, an online pet supply retailer, in 2001, he turned the e-commerce site into an industry leader, and many thought he’d do the same for GameStop. Ryan Cohen, now a majority shareholder of GameStop, first purchased stock in the company in August of 2020 and joined the GameStop board on Jan. More Context: Robinhood Blocks Traders on Reddit and Beyond from Buying GameStop Stock – Make Sense of the Market Mayhem Now, many who bought low are selling high after a message board made it their mission to drive the stock’s price up. In June 2019, the stock was trading for less than $5 and stores were closing all over suburbia. As recently as 2019, investors had all but written off GameStop, the video game company occupying space in strip malls and conventional shopping malls, selling used video games, and offering players pennies on the dollar for their used merch.
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