Robinhood Stops Users From Trading GameStop Stocks, Other Reddit YOLO Picks (2024)

Robinhood, the fee-free investment app that has helped Redditors and other retail investors pump dark horse stocks like GameStop, AMC, BlackBerry, and Nokia, has stopped allowing users to buy those stocks and other YOLO picks.According to screenshots shared on social media, on Thursday morning a notification appeared on Robinhood telling users that they could close their position on GameStop's stock but not buy any additional shares. Redditors are currently panicking, looking for ways to transfer their shares of GameStop off of Robinhood to other platforms, and are generally furious at the platform.

In a blog post, Robinhood confirmed that it has placed restrictions on several stocks due to volatility. “We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities,” the blog post read.

Robinhood did not respond to a request for comment.

Over the past week, the stock market has gone haywire as retail investors on the /r/WallStreetBets subreddit decided to buy the stock of the video-game retailer GameStop en masse. The idea was that GameStop's stock was extremely undervalued, and that hedge funds had overextended themselves by betting against it, or "shorting" it. Now that the meme has caught on and been encouraged by Elon Musk (who famously despises short sellers and whose company Tesla is another retail investor darling), GameStop's stock is worth roughly $350, up from $4 in December. BlackBerry, AMC, and Nokia, other WallStreetBets favorites, are also up.The result has been chaos for the funds that shorted GameStop, with Melvin Capital needing to call in a multibillion-dollar backstop investment to cover its losses. In response, several large trading platforms temporarily halted trading on the affected stocks. On Wednesday, the New York Stock Exchange halted trading of GameStop and AMC, and Canada's trading regulator halted BlackBerry. TD Ameritrade restricted users from trading GameStop, AMC, and other stocks, but was not specific about the timeline.

To many retail investors, these justifications seemed like large platforms running cover for institutional investors being buffeted by the chaos. Chaos, notably, that large institutions often foment and exploit for profit themselves. Indeed, establishment-types are very, very mad at retail investors right now. On Wednesday, Secretary of the Commonwealth of Massachusetts William Galvin even suggested that platforms should halt trading for an entire month for the affected stocks.With trading platforms, regulators, and politicians all in the mix now, it seems like the GameStop saga is still far from over.Update: This article was updated to include Robinhood’s blog post.Correction: An earlier version of this article stated that 56 percent of Robinhood users hold GME stock. This is incorrect, based on a misreading of a statistic on Robinhood. Motherboard regrets the error.