Robinhood to graciously allow us serfs to buy more stonks
Damn the man!
If you don’t hold any stocks or aren’t a retail trader (which is a term of endearment the wealthy bestowed upon us serfs that dabble in the stock market), then you probably don’t give a flappy hoot about the last few days of Wall Street fuckery.
Basically, the wealthy few got pissed that the stock market was being manipulated by someone other than themselves (a good summary of this here) and, in conjunction with clearinghouses, including popular trading app Robinhood, restricted trading on certain stocks.
It’s a lot. It’s been a lot. But after the last four years of dealing with that racist orange buffoon, it’s kind of refreshing to have a new issue to froth us into a justified frenzy.
Yesterday, Robinhood halted trading on the affected stocks, the ones the meme lords decided to use to enact revenge on hedge fund managers. Gamestop, AMC, some Australian clothing manufacturer called Naked, Koss, Blackberry, and others were shut down for trading. This caused the stock price to plummet, pushing out some of the more thin-skinned traders who are afraid of the loss they might incur by holding. The CEO of Robinhood, Vlad Tenev, felt this was the right move to protect its users and his company’s ass.
“As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment,” said Tenev on Twitter.
Robinhood was overwhelmed by the trading activity and pulled this shit in order to mitigate its own risk, thereby lowering the prices of the stocks and squeezing the retail traders.
This move incurred the wrath of not only Robinhood users (as other apps had also halted trading, but at the direction of their clearinghouse partners) but lawmakers like Alexandria Ocasio-Cortez, Ted “Zodiac Killer” Cruz, and others. The decision was grounded in billions of dollars of possible losses for Robinhood, as it immediately set out to secure billions of dollars from its investors. This is why no matter how pissed we are at Robinhood, how pissed we lowly retail traders are at the market, there is enough big money confidence in the company that it won’t be going anywhere any time soon. So sure, we can dump our positions and scramble to another app, but that won’t change much.
Robinhood is a free app and a private company (even though it has an IPO planned for later this year). That doesn’t give it carte blanche to do whatever the hell it wants, but it does put the users in a precarious position. We now know it answers to big money Wall Street, not to the users. But from our point-of-view, what stock market system doesn’t answer to Wall Street? Robinhood claims to be a democratized trading app for the people, but this week proved that isn’t necessarily the case.
What will change the status of Robinhood as a viable trading service is any regulation slapped upon it from the SEC or government oversight committees
But this, too, is speculative. As we all well know from watching the movie The Big Short and living through that era, big money always wins. There is nothing in the history or behavior of our government that implies that they would take a harder tact now, beyond spicy tweets. However, many lawmakers have smartly looked beyond Robinhood at the hedge fund assholes who live off shorting stocks and caused this whole mess. So it’s possible something good might come of all this.
Meanwhile, back in retail trading land, Robinhood is set to allow (oh gee whiz thanks) limited trading of the stocks in question starting at the opening bell this morning. Considering margin calls are up today, this could be the last day of the volatile week of trading, as far as these particular stocks are concerned. There are still plenty of hedge funds to take down, plenty of stocks that are shorted to the gills. Now the question remains, should you dump Robinhood for another trading app such as Public or WeBull?
Sure, do whatever you want. My crypto is trapped at Robinhood (it holds the wallet keys) so I’m staying put. The company isn’t going anywhere anytime soon, government and the internet have a short memory. We know this. I’m not happy about it, and I wish it were easier to justify dumping my positions and going to another app, but I’ve got about as much invested in stocks as I spend on groceries in a month, so I’m not too stressed about it.
That’s the thing though, so many of us serfs have very little invested, so our level of concern here is middling at best. We get angry, then move on, and nothing changes. Just wait ’til we all become Dogecoin millionaires.
Of course, that won’t be possible if Robinhood keeps fucking around, as it is now restricting trading on crypto, not allowing any unsettled cash to be used for new buys. Which, kind of makes sense because unsettled cash isn’t real yet.
Damn the man! Take down the system! Or don’t. Your call. The truth is that no matter what happens now, eventually, the next generation of investors will push out the old boomer money, either by natural attrition or completely gaming the system. This week was a preview of what’s to come. Wall Street is officially on notice. The new blood is here.
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