GameStop & AMC shares plummet after Robinhood & WeBull BLOCK ‘Reddit rally’ as politicians slam move to help Wall Street
GAMESTOP and AMC shares plummeted on Thursday after Robinhood and WeBull blocked "Reddit rally" as politicians slammed the move to help Wall Street.
On Thursday morning, GameStop shares fell by more than 50 percent.
- a popular app among amateur stock traders which was founded by Baiju Bhatt and Vlad Tenev - offers trading tools, stock tips and even a cryptocurrency exchange where users can invest in Bitcoin.
Several Robinhood users reported problems with the platform after the investment company clamped down on the stocks claiming they were too volatile following huge price swings pushed by a Reddit group.
What is Robinhood and how can I buy stock through the app?
Platforms like Robinhood claim to make investing so simple that anyone can give it a go – though they come with their own risks.
Robinhood is an app popular among amateur stock traders, with hundreds of thousands of downloads across Apple and Google's app stores.
The platform, which also has a website, offers trading tools, stock tips and even a cryptocurrency exchange where users can invest in Bitcoin.
Robinhood was founded by Baiju Bhatt and Vlad Tenev, two children of immigrants who met at Stanford University in 2005.
They were inspired by the Occupy Wall Street protests to create an app that made the stock market more accessible.
The issues were reported just minutes after Robinhood removed .
In response to Robinhood preventing users from trading GameStop stocks, Donald Trump Jr : "Yea I don’t recall the part of the story when Robin Hood sells out and starts to be a mercenary for the crown...
"Apparently everyone has a price,"; he wrote, followed by "#ToTheMoon," "#GameStop" and rocket ship emojis.
Alexandria Ocasio-Cortez also took to : ";This is unacceptable.
Brendon Nelson, a Massachusetts resident filed the federal suit representing anyone affected by the app's changes.
"On or about January 27, 2021 Robinhood, in order to slow the growth of GME deprived their customers of the ability to use their service, abruptly, purposefully, willfully, and knowingly pulled GME from their app," the suit reportedly states.
"Meaning, retail investors could no longer buy or even search for GME on Robinhood’s app."
It comes after yesterday when the amateur traders sent shares for the retailer GameStop skyrocketing in a move that left major hedge funds reeling from billions of dollars in losses.
The Wall Street trolls, apparently led by finance expert "Roaring Kitty," are driving up share prices by betting against Wall Street short-sellers.
WallStreetBet's followers have caused such a massive disruption to the stock market that they have attracted the attention of authorities, and even the White House.
"Our economic team, including (Treasury) Secretary (Janet) Yellen and others are monitoring the situation," White House Spokeswoman Jen Psaki said on Wednesday.
"It's a good reminder, though, that the stock market isn't the only measure of the health of our economy," she added.
The move didn't go unnoticed by other investors, with former Trump official Anthony Scaramucci tweeting: "We are witnessing the French Revolution of Finance."
The Securities and Exchange Commission also confirmed on Wednesday that it was monitoring the activity.
A number of big-time hedge funds who shorted GameStop stock speculating that share prices would fall are now dealing with massive losses.
Citron and Melvin Capitol said on Wednesday that they had closed out their short positions after suffering undisclosed losses. Experts speculate those could be in the billions.
GameStop isn't the only company being targeted by the Wall Street trollers.
Stock skyrocketed for other companies that had been heavily shorted by Wall Street firms as well.
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AMC Entertainment's shares jumped a whopping 300 percent on Wednesday, and BlackBerry's were up 33 percent.
Wall Street experts warn, however, that the skyrocketing stock prices will not likely last long, as they do not reflect the health of the businesses.