Robinhood recently added new limits to block users from buying or trading some of the popular stocks on the Reddit r/WallStreetBets stocks just days after the craze went viral.
What’s going on?
Robinhood — which allows people to buy and trade stocks — said in a new statement that it added new restrictions to stop people from buying the following stocks, as well as others:
- GameStop ($GME)
- AMC ($AMC)
- BlackBerry ($BB)
- Bed Bath & Beyond ($BBBY)
- Nokia ($NOK)
The company told The Verge that the “recent volatility” in the market was the reason for blocking the access.
“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.”
All of these stocks were hyped by the Reddit page in recent days. Multiple Redditors became investors, putting money into those stocks in order to combat short-sellers, who had sold their stocks at high prices and looked to buy back when the stocks were low, as I wrote about for the Deseret News.
What happened next
Per CNBC, the GameStop stock slipped from $500 in the morning to $290 on Thursday morning because of the Robinhood news.