Is the Robinhood app legitimate 2
Robinhood allows limited game stop purchases and restricts crypto trading
Online trading platform Robinhood came under fire last week after it prevented shares in Gamestop, AMC, Blackberry and Nokia from trading on Thursday. The so-called meme shares became popular as part of a "short squeeze" initiated by amateur investors at the Reddit forum r / WallStreetBets - DER STANDARD reports. On Friday, the platform allowed the shares to be bought again, but limited it on one share per person.
Robinhood under pressure
Previously, the trading app was used by amateur investors to drive the value of heavily "shorted" stocks so that sellers of borrowed securities, including hedge funds betting on a falling price, would lose money. In the past week, the so-called "short sellers" lost around 20 billion US dollars due to the rush of buyers for Gamestop shares. On Thursday, Robinhood threw the emergency brake and blocked purchases of meme stocks Gamestop, AMC and Blackberry, but allowed the sale to continue. Criticism came from small investors who suspected market manipulation or support for hedge funds.
Purchase possible again
As "The Wall Street Journal" reported, Robinhood received a cash injection of one billion US dollars from investors on Thursday evening. The trading app then allowed the purchase of the meme shares again. Initially, a maximum of five shares could be acquired per person, then two and finally only one. As a result, the value of Gamestop stock rose 67.6 percent on Friday and grew 800 percent for the entire week.
Crypto trading restricted
After the meme crypto currency Dogecoin shot up by 300 percent within 24 hours, and Bitcoin also experienced a rapid increase after Elon Musk made his support on Twitter, the trading app Robinhood also significantly restricted crypto trading on its platform . Since Friday, no more money can be deposited there for trading cryptocurrencies.
According to a press spokesman for Robinhood, the reason for the restriction is the "exceptional market conditions". The meme cryptocurrency was launched as a joke on Twitter in 2013. (hsu, January 30th, 2021)
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