Anyone else watching the Reddit community ******* with wall street hedge fund companies these last couple days?
Stocks - GameStop
- Thread starter Ironcitysteelers
- Start date
My son is a part of that community as of late. He's a Robinhood user and mini-investor at 18 years old. Every day I hear from him about it. He's laughing his *** off about it.
I think it's great, to be honest.
I think it's great, to be honest.
To me that is the best part. You got a lot of young people, forced to bar themselves in their homes, for a year. Video games have run their course. Many, like my 18 year old, are looking at stocks. And revamped interests in football card trading, etc.
The group soars to 3 million users or something. And collectively when they say hey, here's a good tip, they can move the markets.
Then they see GameStop, something they all grew up with, tanking....well like the local townspeople banding together to save George Bailey and the Building and Loan by each pitching in a few bucks - they all joined together buying 1, 2, 3 stocks each. They drove the price from $18 to over what, $300 a share?
This group doesn't give a **** what Wall Street is doing. They don't care that the elite Wall Street investors were steering the market and trying to short it. Frankly, I doubt they knew or researched or had much insight into what was going on with investors at all. Simply, they were trying to save their store, GameStop.
How can this be deemed bad or illegal?
Charles Schwab can send out emails and flyers and call their clients and tell them all "invest in X!" But you're telling me in today's smart phone, digital information, instantaneous world, groups of users can't get together and share information among themselves and make investing decisions?
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What's the group on Reddit?
Beside my long term invests getting crushed this week bc of this, I ******* love it. Illegal **** happening right in front of us. Robinhood stopped buying mid day yesterday which tanked the stock. That **** is illegal. I’m watching this streamer who was in that YouTube vid. For background noise while I work. ******* awesome.
r/WallStreetBets
Yep, the illegality here is what the companies like Robinhood are doing to combat it.
NY AG reviewing Robinhood after the platform restricted the trading of certain securities Thursday
Lawmakers slammed Robinhood for restricting trading Thursday
https://www.foxbusiness.com/markets...ed-the-trading-of-certain-securities-thursday
New York Attorney General Letitia James announced she is looking into recent activity on Robinhood after the trading platform restricted trading of certain securities Thursday, resulting in multiple lawsuits against the company.
“We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock," James said in a statement. "We are reviewing this matter.”
Robinhood and other trading platforms announced Thursday that they were restricting trading for a handful of securities that have exploded in value this week, including GameStop, AMC, BlackBerry, Tootsie Roll, Trivago, and others.
Lawmakers slammed Robinhood for restricting trading Thursday
https://www.foxbusiness.com/markets...ed-the-trading-of-certain-securities-thursday
New York Attorney General Letitia James announced she is looking into recent activity on Robinhood after the trading platform restricted trading of certain securities Thursday, resulting in multiple lawsuits against the company.
“We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock," James said in a statement. "We are reviewing this matter.”
Robinhood and other trading platforms announced Thursday that they were restricting trading for a handful of securities that have exploded in value this week, including GameStop, AMC, BlackBerry, Tootsie Roll, Trivago, and others.
https://www.fool.com/investing/how-to-invest/stocks/how-to-short-stock/
How to Short a Stock
If you've ever wanted to make money from a company's misfortune, selling stocks short can be a profitable -- though risky -- way to invest.
Matthew Frankel, CFP
(TMFMathGuy)
Sep 16, 2020 at 10:44AM
Sometimes investors become convinced that a stock is more likely to fall in value than to rise. If that's the case, investors can potentially make money when the value of a stock goes down by using a strategy called short selling. Also known as shorting a stock, short selling is designed to give you a profit if the share price of the stock you choose to short goes down -- but can also lose money for you if the stock price goes up.
Why would you short a stock?
Typically, you might decide to short a stock because you feel it is overvalued or will decline for some reason. Since shorting involves borrowing shares of stock you don't own and selling them, a decline in the share price will let you buy back the shares with less money than you originally received when you sold them.
However, there are some other situations in which shorting a stock can be useful. If you own a stock in a particular industry but want to hedge against an industrywide risk, then shorting a competing stock in the same industry could help protect against losses. Shorting a stock can also be better from a tax perspective than selling your own holdings, especially if you anticipate a short-term downward move for the share price that will likely reverse itself.
How do you short a stock?
In order to use a short-selling strategy, you have to go through a step-by-step process:
A simple example of a short-selling transaction
Here's how short selling can work in practice: Say you've identified a stock that currently trades at $100 per share. You think that stock is overvalued, and you believe that its price is likely to fall in the near future. Accordingly, you decide that you want to sell 100 shares of the stock short. You follow the process described in the previous section and initiate a short position.
When you sell the stock short, you'll receive $10,000 in cash proceeds, less whatever your broker charges you as a commission. That money will be credited to your account in the same manner as any other stock sale, but you'll also have a debt obligation to repay the borrowed shares at some time in the future.
Now let's say that the stock falls to $70 per share. Now you can close the short position by buying 100 shares at $70 each, which will cost you $7,000. You collected $10,000 when you initiated the position, so you're left with $3,000. That represents your profit -- again, minus any transaction costs that your broker charged you in conjunction with the sale and purchase of the shares.
What are the risks of shorting a stock?
Keep in mind that the example in the previous section is what happens if the stock does what you think it will -- declines.
The biggest risk involved with short selling is that if the stock price rises dramatically, you might have difficulty covering the losses involved. Theoretically, shorting can produce unlimited losses -- after all, there's not an upper limit to how high a stock's price can climb. Your broker won't require you to have an unlimited supply of cash to offset potential losses, but if you lose too much money, your broker can invoke a margin call -- forcing you to close your short position by buying back the shares at what could prove to be the worst possible time.
In addition, short sellers sometimes have to deal with another situation that forces them to close their positions unexpectedly. If a stock is a popular target of short sellers, it can be hard to locate shares to borrow. If the shareholder who lends the stock to the short seller wants those shares back, you'll have to cover the short -- your broker will force you to repurchase the shares before you want to.
Be careful with short selling
Short selling can be a lucrative way to profit if a stock drops in value, but it comes with big risk and should be attempted only by experienced investors. And even then, it should be used sparingly and only after a careful assessment of the risks involved.
The Motley Fool has a disclosure policy.
How to Short a Stock
If you've ever wanted to make money from a company's misfortune, selling stocks short can be a profitable -- though risky -- way to invest.
Matthew Frankel, CFP
(TMFMathGuy)
Sep 16, 2020 at 10:44AM
Sometimes investors become convinced that a stock is more likely to fall in value than to rise. If that's the case, investors can potentially make money when the value of a stock goes down by using a strategy called short selling. Also known as shorting a stock, short selling is designed to give you a profit if the share price of the stock you choose to short goes down -- but can also lose money for you if the stock price goes up.
Why would you short a stock?
Typically, you might decide to short a stock because you feel it is overvalued or will decline for some reason. Since shorting involves borrowing shares of stock you don't own and selling them, a decline in the share price will let you buy back the shares with less money than you originally received when you sold them.
However, there are some other situations in which shorting a stock can be useful. If you own a stock in a particular industry but want to hedge against an industrywide risk, then shorting a competing stock in the same industry could help protect against losses. Shorting a stock can also be better from a tax perspective than selling your own holdings, especially if you anticipate a short-term downward move for the share price that will likely reverse itself.
How do you short a stock?
In order to use a short-selling strategy, you have to go through a step-by-step process:
- Identify the stock that you want to sell short.
- Make sure that you have a margin account with your broker and the necessary permissions to open a short position in a stock.
- Enter your short order for the appropriate number of shares. When you send the order, the broker will lend you the shares and sell them on the open market on your behalf.
- At some point, you'll need to close out your short position by buying back the stock that you initially sold and then returning the borrowed shares to whoever lent them to you, via your brokerage company.
- If the price went down, then you'll pay less to replace the shares, and you keep the difference as your profit. If the price of the stock went up, then it'll cost you more to buy back the shares, and you'll have to find that extra money from somewhere else, suffering a loss on your short position.
A simple example of a short-selling transaction
Here's how short selling can work in practice: Say you've identified a stock that currently trades at $100 per share. You think that stock is overvalued, and you believe that its price is likely to fall in the near future. Accordingly, you decide that you want to sell 100 shares of the stock short. You follow the process described in the previous section and initiate a short position.
When you sell the stock short, you'll receive $10,000 in cash proceeds, less whatever your broker charges you as a commission. That money will be credited to your account in the same manner as any other stock sale, but you'll also have a debt obligation to repay the borrowed shares at some time in the future.
Now let's say that the stock falls to $70 per share. Now you can close the short position by buying 100 shares at $70 each, which will cost you $7,000. You collected $10,000 when you initiated the position, so you're left with $3,000. That represents your profit -- again, minus any transaction costs that your broker charged you in conjunction with the sale and purchase of the shares.
What are the risks of shorting a stock?
Keep in mind that the example in the previous section is what happens if the stock does what you think it will -- declines.
The biggest risk involved with short selling is that if the stock price rises dramatically, you might have difficulty covering the losses involved. Theoretically, shorting can produce unlimited losses -- after all, there's not an upper limit to how high a stock's price can climb. Your broker won't require you to have an unlimited supply of cash to offset potential losses, but if you lose too much money, your broker can invoke a margin call -- forcing you to close your short position by buying back the shares at what could prove to be the worst possible time.
In addition, short sellers sometimes have to deal with another situation that forces them to close their positions unexpectedly. If a stock is a popular target of short sellers, it can be hard to locate shares to borrow. If the shareholder who lends the stock to the short seller wants those shares back, you'll have to cover the short -- your broker will force you to repurchase the shares before you want to.
Be careful with short selling
Short selling can be a lucrative way to profit if a stock drops in value, but it comes with big risk and should be attempted only by experienced investors. And even then, it should be used sparingly and only after a careful assessment of the risks involved.
The Motley Fool has a disclosure policy.
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On this day in history I agreed with AOC on something.
Now if we could just get a run on Sunkist (not the oranges), a series of weed stores in CA that I own 4000 shares of that I paid one-third of cent for.
Now if we could just get a run on Sunkist (not the oranges), a series of weed stores in CA that I own 4000 shares of that I paid one-third of cent for.
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Robin Hood might lose a shiltload of users. Their whole angle is that they are for the little guy but this exposed that they are controlled by the elitists. Another thing that came out is that Robin Hood collects trade and search info and sells it to hedge funds. That’s right. They collect all the searches their members do and trades they may research and sell that info to the big guys.
Big Tech is now a problem. There needs to be laws protecting our data.
Big Tech is now a problem. There needs to be laws protecting our data.
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interesting analogy with It’s a Wonderful Life. As you recall, George did get bailed out but Potter got away with stealing the $8000.
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I collaborated with someone who has a Hedge Fund on several projects this past year.
He wasn’t hurt by it but don’t buy this widespread narrative they are pushing. It’s just dumb and this is a 1-off
Sent from my iPhone using Steeler Nation mobile app
He wasn’t hurt by it but don’t buy this widespread narrative they are pushing. It’s just dumb and this is a 1-off
Sent from my iPhone using Steeler Nation mobile app
I disagree. This week showed the blatant corruption that is a “free market”. It’s not free, **** eddy proved it the years ago(nice pic above btw). We are the sheep and when the billionaire are in threat they pull bs acts like Robinhood did to kill the price and save them while crushing the little guy. I hope this continues. I’m glad people like musk and god am I actually saying AOc calling them out.
Edit. I say this as my 401 and the like (bc of this)to a dump this week. So yeah
Edit. I say this as my 401 and the like (bc of this)to a dump this week. So yeah
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I got out of 80% stocks back in January. extremely lucky timing. After March and Aprils falls I jumped back in. Last month my accountant mentioned GME I think it was around $17.00 a share at the time. I said no lets go with something safer.... the stock I picked is up 4% in the month...... GME was up something like 1500% . yep
Did the same a few months before the election and my broker tried to talk me out of it. I questioned my decision when the markets continued to rise, but feel better about it now until this all gets sorted out.
But not to worry, I'm sure Joe has a plan for this as well.
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Joe's plans seem to have one common premise: "Does it hurt the American middle class?" If yes, then part of plan; if no, then right-wing profiteering.
This is a GREAT read by Kurt Schlichter. GREAT. He sums it all up and we are puppets in the game. Enjoy it.
GameStop Lets You See the Matrix
There’s nothing more tiresome than hackneyed references to The Matrix, except for the constant propaganda we’re hosed down with by the Establishment and its media lackeys about how everything is groovy in our totally free, free enterprise paradise of freedom and happiness and more freedom. Some of us have been woke for a while, having realized the undeniable truth that the system is rigged for the benefit of a garbage ruling class, whose sole accomplishment is to perpetuate a paradigm in which they maintain power and prestige by controlling institutions they didn’t create or build. Instead, they are cultural trust fund babies, the equivalent of third generation Kennedy brats with substance issues who got into power by getting into the right schools and modeling the right SJW attitudes. These oligarch overseers rely on us to toil in their figurative fields while they sit on their figurative porches, sipping locally-sourced figurative mint juleps.
I say burn it all down and rebuild America into what it is supposed to be, that is, what they tell us it is when they lie to us.
I’m not alone. We’re primed for some conservative anarchy. The normals’ resistance cannot be quelled; the revolution will be Telegrammed. Everyone’s gobbling up red pills, the one medication our incompetent Establishment is fully capable of distributing efficiently and effectively. You drop one and you see the Matrix. You see the lie. You see that it’s all rigged.
True story…
It not being illegal yet (Soon!), I go speak at conservative groups, conservative events (I’ve been invited to speak at CPAC – see you there), and conservative children’s parties, and I recently went to speak to one of my favorite groups, the Republican ladies of Newport Beach. Now, if you know anything about Newport Beach, you know it’s a nice place. Really nice. Sweet BMWs and Mercedes-Benzes glide past zillion dollar mansions and swaying palm trees. So, you might walk in with the idea that these ladies were the Lovey Howells of the Gilligan’s Island of American conservatism.
No.
They were more like Lauren Boeberts – and I mean with her awesome gun thing going on too.
I mentioned GameStop and these ladies not only knew what it was, but they cheered the armchair day trader anarchists. And they booed the hedge funders.
Rich Orange County Republicans booed the hedge funders.
And they booed Liz Cheney and Mitt Romney, with one exception, Nikki! Haley too. The ones who had heard of the Bulwark booed it as well, so there were like three of those.
Populists in pearls, fully red pilled and woke as hell. They saw how the Establishment has been lying to them. They realized that they were never really members of the ruling caste despite their sweet rides and bank accounts. They were allowed its material trappings, but they were excluded from the real power, the power to govern themselves.
They have more in common with the Keystone pipeline worker John Kerry wants to go make solar panels – which seems unrealistic, since his Chi Com collaborators make them all – than with the rich and truly powerful elite.
People are getting woke – the red pill is socio-political anti-Ambien because it keeps you from falling back asleep and not seeing that everything is rigged.
They see how the ruling caste allows you this little band of autonomy, and how you are allowed some leeway to improve your material life, but the instant you try to assert power that threatens the status quo, the Matrix kicks in and its immune system reacts to snuff you out.
That was the revelation of the GameStop Revolution. You’re allowed to put your money into Wall Street and they might let you take some pennies out, but if you try to go big and play at the same level as the anointed, oh no. You don’t get to. The system shuts you down – literally. You can’t buy the hot stock. Does that apply to the hedge fund guys? You think they can’t play after you’ve been sidelined? Come on. It’s blatant market manipulation, but Wall Street owns the Asterisk Administration – Treasury Secretary & Lord High Protector of the Masters of the Universe Janet Yellin took nearly a million bucks to “speak” to the lever-pullers behind the RobinHood app – and the Administration owns the SEC, and do you think it will investigate the hedge funders who changed the rules? No, but look for FBI SWAT teams to be hitting the basements where the Reddit rebels live. That is, right after they bust more conservative meme guys for illegal memes.
Really – felony memes. It’s yet another example of the dual system, theirs and ours. How dare the peasants use technology and social media to try to promote their views! Some guy using the name Ricky Vaughn circulated a mildly amusing meme in 2016(!) about Democrats needing to vote by text. He’s looking at ten years. But some lib named Kristina Wong circulated a mildly amusing meme in 2016(!) about Republicans needing to vote by text. From her apartment, she’s looking at Ricky Vaughn looking at ten years.
Brennan, Comey, and McCabe lied multiple under oath and otherwise. Now they’re rich, and the FBI couldn’t manage to make a case on them. An FBI agent lies under oath on a declaration to a judge so the FBI could violate a citizen’s rights and he gets…probation. But some rando tweets a meme and our intrepid heroes want to lock him away for a decade. Maybe they suspected him in a series of inappropriate garage pull knottings.
Say, what’s up with that guy who murdered five dozen conservative country music fans in Vegas? Any developments, G-Men? Would it get you moving if you discovered he posted some questionable memes?
GameStop Lets You See the Matrix
There’s nothing more tiresome than hackneyed references to The Matrix, except for the constant propaganda we’re hosed down with by the Establishment and its media lackeys about how everything is groovy in our totally free, free enterprise paradise of freedom and happiness and more freedom. Some of us have been woke for a while, having realized the undeniable truth that the system is rigged for the benefit of a garbage ruling class, whose sole accomplishment is to perpetuate a paradigm in which they maintain power and prestige by controlling institutions they didn’t create or build. Instead, they are cultural trust fund babies, the equivalent of third generation Kennedy brats with substance issues who got into power by getting into the right schools and modeling the right SJW attitudes. These oligarch overseers rely on us to toil in their figurative fields while they sit on their figurative porches, sipping locally-sourced figurative mint juleps.
I say burn it all down and rebuild America into what it is supposed to be, that is, what they tell us it is when they lie to us.
I’m not alone. We’re primed for some conservative anarchy. The normals’ resistance cannot be quelled; the revolution will be Telegrammed. Everyone’s gobbling up red pills, the one medication our incompetent Establishment is fully capable of distributing efficiently and effectively. You drop one and you see the Matrix. You see the lie. You see that it’s all rigged.
True story…
It not being illegal yet (Soon!), I go speak at conservative groups, conservative events (I’ve been invited to speak at CPAC – see you there), and conservative children’s parties, and I recently went to speak to one of my favorite groups, the Republican ladies of Newport Beach. Now, if you know anything about Newport Beach, you know it’s a nice place. Really nice. Sweet BMWs and Mercedes-Benzes glide past zillion dollar mansions and swaying palm trees. So, you might walk in with the idea that these ladies were the Lovey Howells of the Gilligan’s Island of American conservatism.
No.
They were more like Lauren Boeberts – and I mean with her awesome gun thing going on too.
I mentioned GameStop and these ladies not only knew what it was, but they cheered the armchair day trader anarchists. And they booed the hedge funders.
Rich Orange County Republicans booed the hedge funders.
And they booed Liz Cheney and Mitt Romney, with one exception, Nikki! Haley too. The ones who had heard of the Bulwark booed it as well, so there were like three of those.
Populists in pearls, fully red pilled and woke as hell. They saw how the Establishment has been lying to them. They realized that they were never really members of the ruling caste despite their sweet rides and bank accounts. They were allowed its material trappings, but they were excluded from the real power, the power to govern themselves.
They have more in common with the Keystone pipeline worker John Kerry wants to go make solar panels – which seems unrealistic, since his Chi Com collaborators make them all – than with the rich and truly powerful elite.
People are getting woke – the red pill is socio-political anti-Ambien because it keeps you from falling back asleep and not seeing that everything is rigged.
They see how the ruling caste allows you this little band of autonomy, and how you are allowed some leeway to improve your material life, but the instant you try to assert power that threatens the status quo, the Matrix kicks in and its immune system reacts to snuff you out.
That was the revelation of the GameStop Revolution. You’re allowed to put your money into Wall Street and they might let you take some pennies out, but if you try to go big and play at the same level as the anointed, oh no. You don’t get to. The system shuts you down – literally. You can’t buy the hot stock. Does that apply to the hedge fund guys? You think they can’t play after you’ve been sidelined? Come on. It’s blatant market manipulation, but Wall Street owns the Asterisk Administration – Treasury Secretary & Lord High Protector of the Masters of the Universe Janet Yellin took nearly a million bucks to “speak” to the lever-pullers behind the RobinHood app – and the Administration owns the SEC, and do you think it will investigate the hedge funders who changed the rules? No, but look for FBI SWAT teams to be hitting the basements where the Reddit rebels live. That is, right after they bust more conservative meme guys for illegal memes.
Really – felony memes. It’s yet another example of the dual system, theirs and ours. How dare the peasants use technology and social media to try to promote their views! Some guy using the name Ricky Vaughn circulated a mildly amusing meme in 2016(!) about Democrats needing to vote by text. He’s looking at ten years. But some lib named Kristina Wong circulated a mildly amusing meme in 2016(!) about Republicans needing to vote by text. From her apartment, she’s looking at Ricky Vaughn looking at ten years.
Brennan, Comey, and McCabe lied multiple under oath and otherwise. Now they’re rich, and the FBI couldn’t manage to make a case on them. An FBI agent lies under oath on a declaration to a judge so the FBI could violate a citizen’s rights and he gets…probation. But some rando tweets a meme and our intrepid heroes want to lock him away for a decade. Maybe they suspected him in a series of inappropriate garage pull knottings.
Say, what’s up with that guy who murdered five dozen conservative country music fans in Vegas? Any developments, G-Men? Would it get you moving if you discovered he posted some questionable memes?
Robinhood Made Nearly $700 Million By Selling User Data To Hedge Funds
Robinhood is facing backlash for appearing to aid institutional investors over individual traders after the popular investing app blocked users from purchasing shares in GameStop and other companies that experienced a price explosion in January.
GameStop’s share price rose to nearly $500 last week as retail investors drove up the price against hedge funds and other institutional investors. These investors had previously shorted 140% of GameStop’s existing shares on the assumption that the security would decrease in value.
Institutional investors caught in the short squeeze faced considerable financial loss. The hedge fund Melvin Capital Management lost more than half of its $12.5 billion portfolio in January, according to The Wall Street Journal.
Many of the online retail investors were using Robinhood and slammed the company for blocking users from purchasing shares of GameStop and other companies. Robinhood said in a Jan. 28 statement that it restricted transactions for certain securities due to “significant market volatility.”
Robinhood later stated in an open letter to users Monday that the company had to halt trading to meet clearinghouse deposit requirements that support customer trades. In an earlier statement released Friday, the company said its deposit requirements for equities had increased tenfold due to the market’s considerable volatility.
Robinhood staunchly rejected allegations that it wanted to stop users from trading or that its actions were designed to help hedge funds.
A class action lawsuit was filed against Robinhood last week alleging that the company’s “actions were done purposely and knowingly to manipulate the market for the benefit of people and financial intuitions who were not Robinhood users.”
CNN host Chris Cuomo also grilled Robinhood chief executive Vlad Tenev over his company’s decision to restrict trading during a Friday appearance. He noted that the decision occurred after Robinhood’s clients began to lose money from the short squeeze.
“This looks like a move by an outfit called Robinhood, which is supposed to be taking from the rich and giving to the poor, and doing exactly the opposite,” Cuomo said.
One reason why allegations against Robinhood have persisted may have to do with the company’s controversial revenue model, which has led to a surge in earnings over the last two years, according to CNBC.
Robinhood has long branded itself as an accessible platform that provides free financial services for its users. Its mission statement includes a pledge to “democratize finance for all.” But the company makes money by selling its order flow — information about user transactions — to third party clients who actually enact trades with access to user data.
Robinhood is facing backlash for appearing to aid institutional investors over individual traders after the popular investing app blocked users from purchasing shares in GameStop and other companies that experienced a price explosion in January.
GameStop’s share price rose to nearly $500 last week as retail investors drove up the price against hedge funds and other institutional investors. These investors had previously shorted 140% of GameStop’s existing shares on the assumption that the security would decrease in value.
Institutional investors caught in the short squeeze faced considerable financial loss. The hedge fund Melvin Capital Management lost more than half of its $12.5 billion portfolio in January, according to The Wall Street Journal.
Many of the online retail investors were using Robinhood and slammed the company for blocking users from purchasing shares of GameStop and other companies. Robinhood said in a Jan. 28 statement that it restricted transactions for certain securities due to “significant market volatility.”
Robinhood later stated in an open letter to users Monday that the company had to halt trading to meet clearinghouse deposit requirements that support customer trades. In an earlier statement released Friday, the company said its deposit requirements for equities had increased tenfold due to the market’s considerable volatility.
Robinhood staunchly rejected allegations that it wanted to stop users from trading or that its actions were designed to help hedge funds.
A class action lawsuit was filed against Robinhood last week alleging that the company’s “actions were done purposely and knowingly to manipulate the market for the benefit of people and financial intuitions who were not Robinhood users.”
CNN host Chris Cuomo also grilled Robinhood chief executive Vlad Tenev over his company’s decision to restrict trading during a Friday appearance. He noted that the decision occurred after Robinhood’s clients began to lose money from the short squeeze.
“This looks like a move by an outfit called Robinhood, which is supposed to be taking from the rich and giving to the poor, and doing exactly the opposite,” Cuomo said.
One reason why allegations against Robinhood have persisted may have to do with the company’s controversial revenue model, which has led to a surge in earnings over the last two years, according to CNBC.
Robinhood has long branded itself as an accessible platform that provides free financial services for its users. Its mission statement includes a pledge to “democratize finance for all.” But the company makes money by selling its order flow — information about user transactions — to third party clients who actually enact trades with access to user data.
