Although HN's guidelines call for original sources (https://news.ycombinator.com/newsguidelines.html), it's generally better to avoid corporate press releases, especially on controversial topics where they tend to use bland, obscure language and bury the lede.
You also cannot search for the short-squeezed stocks from this whole WSB push. They unlisted GME, AMC etc on Robinhood. Searching for them returns nothing. That feels really wrong.
Wow this statement seems much worse than saying nothing.
I am even willing to give Robinhood the benefit of the doubt here, I know it feels like a conspiracy against retail investors, maybe it is, but the stock markets are an extremely complex system and we don't know all of Robinhood's own risks and factors going into this decision.
However, to weigh in without addressing the reasoning at all and only link to resources for people to "educate themselves" is so absurdly out of touch. Maybe they should write up some nice shiny content marketing for hedge fund managers to educate themselves about risk exposure.
What a betrayal of their customers. Really going mask-off with what it means for a startup to "democratize" an industry: allowing the little guy to chip in, but never actually compete with the big boys.
As luck would have it, a S Korean asset managment company sold its considerable holding (creating what in normal times would be a classic stock overhang) just when retail trading platforms had selectively blocked stock buys for GME et al.
I f-ing hate these PR-approved statements by companies. Explain to me how these two sentences could be in the same statement:
> In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG.
> We fundamentally believe that everyone should have access to financial markets.
Bullshit.
Edit: if you have a Robinhood account, you should close it today.
I haven't minded Robinhood's repeated failures to keep their service operating when market volatility is high, because I'm not trying to time the market. But this... this is entirely unacceptable.
I asked on twitter but didn't really get a response to this but I'm curious if someone involved in the industry can answer this for me:
If Robinhood is only allowing users to sell, can they choose to sell* (route the customer's sell order) to hedge funds that need to close out their short positions? Is that a thing they can do?
*EDIT: I realize that robinhood is passing along these orders to their market maker of choice - so my question really is that can the market maker here preferably sell to hedge funds looking to close their short positions?
Hedge funds don't use Robinhood, so this won't affect their ability to buy or sell. The price plummeted today because of Robinhood and other small brokerages restricting trading the day before lots of shares would have to be purchased to cover in the money options.
So, many retail users of Robinhood and other brokerages couldn't buy, could only sell, while hedge funds and other institutions could continue to do what they want.
The rules should be the same for everyone, all of the time. If Jane StockPicker can't buy a security, then nobody else should be able to. I'm honestly furious about this. I made a small amount of money on GME and cashed out a couple days ago - the shorts were in a bad spot, too bad - so seeing how other retail investors are being screwed over here makes me feel sick.
Oh, and Melvin Capital (one of the short sellers who has been most screwed by taking a bad position) was bailed out by Citadel, and guess who one of Robinhood's investors is?
I'm not exaggerating when I say that there needs to be a congressional hearing and SEC investigation. You can say what you want about retail traders exchanging ideas on WSB, a public forum, but closing down trading for retail investors cost them a lot of money early and why were hedge funds able to short a stock so heavily?
Pending investigation, this is a serious problem and I think there is likely to be ongoing corruption here.
Reminds me of how a casino can kick anyone out just because they are winning too much. I think everyone knows that the stock market is rigged but moves like this just completely drop any kind of pretense.
Also translation: "We think you'll come back, but if the people who pay us - the hedgefunds go under - then we'll be shit out of luck too. Sorry not sorry".
The responses in this thread are frankly disturbing.
People are accusing Robinhood of manipulating the market on behalf of short funds, when WSB had literally been systematically stopping these funds out. Pot and kettle much?
People don't seem to understand what is protective about these actions. They aren't stopping anyone from closing positions - just from opening or adding to positions in the middle of a speculative mania. However you feel about that, it's exactly what retail brokers do, and always has been. Do you really think people buying into AMC right now are anything other than bag holders? The company is teetering on bankruptcy. The stock will quite possibly be worth $0 in the next year or so. Why should Robinhood let people blow up their accounts? How would the SEC and CFTC look upon that?
People are saying this is unacceptable and that they're going to move to a different broker. What broker? Virtually all of the retail brokers did this today.
I think Robinhood is a terrible broker that encourages overtrading and frames markets as being almost purely about price action, and if you want to close your account there and move to a better broker then I think that's great. But the reasons being given here are disconnected with reality.
>However you feel about that, it's exactly what retail brokers do, and always has been.
Please, elaborate on the last time a broker or brokers did this when the stock was >140% shorted, let alone any other time they stopped retail investors from losing money on an overpriced stock.
This stinks of market manipulation, and you're a fool if you think it's for retail investor protection.
Robinhood is in a tough position. Retail is going crazy for the stock because it seems like everyone else is, and is clearly not based on fundamentals. But what can Robinhood do? It’s possible the huge institutional shareholders have sold off their positions to main st and now they will get stuck holding the bag. Fidelity and Blackrock might have made $10B each from this runup while selling to these buyers. Most folks will have huge losses.
The WSB narrative is that it’s Melvin capital holding all of those short shares, and they want to stick it to them. But we don’t really know how many shares they actually hold, surely they aren’t 100% of the short interest. It will be very interesting once all this unwinds and we see who was holding what.
Why is RH in a tough position? They're a market maker, not a market controller. This should just be a reminder to everyone that if you're getting commission free trades, you're not the customer and your interests come after the real customers.
Yeah, RH could legitimately be trying to protect their users from what is basically a pump & dump scheme. Alternatively, they could be having liquidity troubles, or backend trouble, etc. If you are serious about trading you should not be on RH...
I really wonder if a court would entertain a temporary injunction forcing RH to reverse this move.
Temporary equitable relief seems justifiable here -- not a slam dunk but not outside the realm. Especially with the circumstantial evidence that RH is acting against its customers at the benefit of some of its owners.
And surely RH wasn't so dumb to tell Citadel or anyone about this move in advance. Wouldn't that be a serious insider trading claim if they opened any short positions after learning about the move but before it became public?
> I really wonder if a court would entertain a temporary injunction forcing RH to reverse this move.
Almost certainly not. Quoting from a typical motion to deny a temporary injunction:
> As courts have repeatedly emphasized, an injunction represents an “extraordinary remedy” that is never awarded as a matter of right. See Winter v. Natural Res. Def. Council, 555 U.S. 7, 22 (2008). For a preliminary injunction to issue, the moving party has the burden of demonstrating all four of the following elements: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in its favor; and (4) that an injunction serves the public interest. Winter, 555 U.S. at 20.
How is there any irreparable harm here? The worst that a customer would face is that they lose money--which is the most reparable harm.
[+] [-] dang|5 years ago|reply
For pointers to the rest of this massive story graph, see https://news.ycombinator.com/item?id=25933543.
Although HN's guidelines call for original sources (https://news.ycombinator.com/newsguidelines.html), it's generally better to avoid corporate press releases, especially on controversial topics where they tend to use bland, obscure language and bury the lede.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
[+] [-] function_seven|5 years ago|reply
Anyway, here's how we're doing the exact opposite. Our real customers have indicated that they want the following stocks to drop in price:
> $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG
"We’re committed to helping our customers navigate this uncertainty." makes much more sense when read a different way.
[+] [-] jonwachob91|5 years ago|reply
[+] [-] adoxyz|5 years ago|reply
[+] [-] HammadB|5 years ago|reply
[+] [-] cft|5 years ago|reply
[+] [-] cactus2093|5 years ago|reply
I am even willing to give Robinhood the benefit of the doubt here, I know it feels like a conspiracy against retail investors, maybe it is, but the stock markets are an extremely complex system and we don't know all of Robinhood's own risks and factors going into this decision.
However, to weigh in without addressing the reasoning at all and only link to resources for people to "educate themselves" is so absurdly out of touch. Maybe they should write up some nice shiny content marketing for hedge fund managers to educate themselves about risk exposure.
[+] [-] jackfrodo|5 years ago|reply
[+] [-] SirSavary|5 years ago|reply
[+] [-] yottalove|5 years ago|reply
[+] [-] djschnei|5 years ago|reply
[+] [-] cronix|5 years ago|reply
[+] [-] xirbeosbwo1234|5 years ago|reply
[+] [-] samizdis|5 years ago|reply
https://www.marketwatch.com/story/large-gamestop-shareholder...
The optics for this seem poor. As for the smell, more of a stench. [Edit to add: poor and smelly for the retail trading platforms, that is.]
[+] [-] borishn|5 years ago|reply
[+] [-] simonebrunozzi|5 years ago|reply
> In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG.
> We fundamentally believe that everyone should have access to financial markets.
Bullshit.
Edit: if you have a Robinhood account, you should close it today.
[+] [-] jaywalk|5 years ago|reply
[+] [-] sgpl|5 years ago|reply
If Robinhood is only allowing users to sell, can they choose to sell* (route the customer's sell order) to hedge funds that need to close out their short positions? Is that a thing they can do?
*EDIT: I realize that robinhood is passing along these orders to their market maker of choice - so my question really is that can the market maker here preferably sell to hedge funds looking to close their short positions?
[+] [-] ericmay|5 years ago|reply
So, many retail users of Robinhood and other brokerages couldn't buy, could only sell, while hedge funds and other institutions could continue to do what they want.
The rules should be the same for everyone, all of the time. If Jane StockPicker can't buy a security, then nobody else should be able to. I'm honestly furious about this. I made a small amount of money on GME and cashed out a couple days ago - the shorts were in a bad spot, too bad - so seeing how other retail investors are being screwed over here makes me feel sick.
Oh, and Melvin Capital (one of the short sellers who has been most screwed by taking a bad position) was bailed out by Citadel, and guess who one of Robinhood's investors is?
I'm not exaggerating when I say that there needs to be a congressional hearing and SEC investigation. You can say what you want about retail traders exchanging ideas on WSB, a public forum, but closing down trading for retail investors cost them a lot of money early and why were hedge funds able to short a stock so heavily?
Pending investigation, this is a serious problem and I think there is likely to be ongoing corruption here.
[+] [-] youeseh|5 years ago|reply
[+] [-] disease|5 years ago|reply
[+] [-] robjan|5 years ago|reply
[+] [-] youeseh|5 years ago|reply
[+] [-] maxbond|5 years ago|reply
People are accusing Robinhood of manipulating the market on behalf of short funds, when WSB had literally been systematically stopping these funds out. Pot and kettle much?
People don't seem to understand what is protective about these actions. They aren't stopping anyone from closing positions - just from opening or adding to positions in the middle of a speculative mania. However you feel about that, it's exactly what retail brokers do, and always has been. Do you really think people buying into AMC right now are anything other than bag holders? The company is teetering on bankruptcy. The stock will quite possibly be worth $0 in the next year or so. Why should Robinhood let people blow up their accounts? How would the SEC and CFTC look upon that?
People are saying this is unacceptable and that they're going to move to a different broker. What broker? Virtually all of the retail brokers did this today.
I think Robinhood is a terrible broker that encourages overtrading and frames markets as being almost purely about price action, and if you want to close your account there and move to a better broker then I think that's great. But the reasons being given here are disconnected with reality.
[+] [-] castlecrasher2|5 years ago|reply
Please, elaborate on the last time a broker or brokers did this when the stock was >140% shorted, let alone any other time they stopped retail investors from losing money on an overpriced stock.
This stinks of market manipulation, and you're a fool if you think it's for retail investor protection.
[+] [-] beervirus|5 years ago|reply
[+] [-] boatsie|5 years ago|reply
The WSB narrative is that it’s Melvin capital holding all of those short shares, and they want to stick it to them. But we don’t really know how many shares they actually hold, surely they aren’t 100% of the short interest. It will be very interesting once all this unwinds and we see who was holding what.
[+] [-] sauwan|5 years ago|reply
[+] [-] mathgenius|5 years ago|reply
[+] [-] happytoexplain|5 years ago|reply
Simply link the user to relevant news, as they have always done.
[+] [-] ballenf|5 years ago|reply
Temporary equitable relief seems justifiable here -- not a slam dunk but not outside the realm. Especially with the circumstantial evidence that RH is acting against its customers at the benefit of some of its owners.
And surely RH wasn't so dumb to tell Citadel or anyone about this move in advance. Wouldn't that be a serious insider trading claim if they opened any short positions after learning about the move but before it became public?
[+] [-] jcranmer|5 years ago|reply
Almost certainly not. Quoting from a typical motion to deny a temporary injunction:
> As courts have repeatedly emphasized, an injunction represents an “extraordinary remedy” that is never awarded as a matter of right. See Winter v. Natural Res. Def. Council, 555 U.S. 7, 22 (2008). For a preliminary injunction to issue, the moving party has the burden of demonstrating all four of the following elements: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in its favor; and (4) that an injunction serves the public interest. Winter, 555 U.S. at 20.
How is there any irreparable harm here? The worst that a customer would face is that they lose money--which is the most reparable harm.
[+] [-] IgorPartola|5 years ago|reply
[+] [-] youeseh|5 years ago|reply
[+] [-] ralph84|5 years ago|reply
[+] [-] robot1|5 years ago|reply