A week later, Robinhood removes trading restrictions on GameStop and AMC
Robinhood lifted trading limits on GameStop, AMC and other Reddit favorites Friday, easing restrictions that engulfed the free trading app in controversy last week.
“There are currently no temporary limits to increasing your positions,” Robinhood said in a blog post.
Robinhood outraged customers and lawmakers last week by temporarily suspending purchases of GameStop, AMC, BlackBerry and other stocks backed by an army of traders on Reddit. The restrictions set off calls to boycott the online brokerage and set in motion investigations in Congress.
Robinhood has been gradually easing trading restrictions over the past week, increasing the number of shares that users can buy of Reddit stocks.
The startup blamed the temporary buying ban on surging market volatility, which drove its deposit requirements at clearinghouses dramatically higher. Robinhood repeatedly denied it was acting at the behest of hedge funds hurt by the GameStop rally. The trading app turned to investors to rapidly raise $3.4 billion, exceeding its total fundraising in the company’s history to that point.
After crashing more than 83% so far this week, GameStop shares rallied 8% during premarket trading Friday. AMC rose 5%, regaining a slice of its sharp losses this week.
In a Twitter thread Thursday, Robinhood CEO Vlad Tenev acknowledged the challenges facing the fast-growing startup.
“Transforming an industry from the inside takes determination, hard work, investment, and a laser focus on the people we want to serve,” Tenev said. “Occasionally there are shortfalls along the way.”
Treasury Secretary Janet Yellen summoned regulators at the Securities and Exchange Commission, Federal Reserve and other agencies Thursday to discuss the Reddit-driven market volatility.
“The regulators believe the core infrastructure was resilient during high volatility and heavy trading volume and agree on the importance of the SEC releasing a timely study of the events,” the Treasury Department said in a statement Thursday.
Treasury said the SEC and Commodities Futures Trading Commission are reviewing “whether trading practices are consistent with investor protection and fair and efficient markets.”
