This week has witnessed much tumult in the exchange and trading market, whereby Robinhood is now the hottest spot for retail traders. At the spur-of-the-moment, the online broker announced they stopped selling their best stocks that aroused its customers’ consent, including politicians, celebrities, etc.
They believe that Robinhood is now biased with their business, reserving their best stocks for their best clients.
The online broker Chief Executive, Vlad Tenev, seems to be smart with business decisions. He safeguarded the company’s access to trade continually — they also decided to reserve funds until the air is cleared and their temporary ban is due.
Tenev noted that he is on the brink of losing its value. He decided to issue the temporary ban on 13 of its popular stocks on Thursday, including American Airlines, AMC, and GameStop, amongst others, as a means to protect the interest of its business and its customers.
On Thursday, the listed stocks encountered a significant drop that is likely to influence Robinhood’s status, although Tenev noted that he might undo the restrictions by Friday.
“The brokerage had tapped into credit lines so that we could maximize, within reason, the funds we have to deposit at the clearinghouses, to endorse trade continually,” Tenev told CNBC.
“We understand our customers are upset. We’re doing what we can to re-enable buying in these names. We want to be clear in the communications, and I own that we should have been out there a little bit sooner,” he continued.
Over time, the online trading platform has accommodated small-time traders, and their recent business decision has also affected their productivity. Aside from Robinhood, Interactive Brokers also restricted its customers from trading.
According to critics, they believe companies like Robinhood and other synonymous companies would rather let their businesses “burn to the ground” than fulfill their end of the bargain that allows its customers to enjoy endless “free trade.”
Twitter users tabled the matter online then trend the idea that Robinhood conducted business illegally — “Robinhood? Nah y’all ROBBING the HOOD,” a shared tweet. The online broker did not comment on the accusations, although the chief executive noted that he only restricted buying shares, but its users can still sell shares.
According to Bloomberg’s report, Tenev did not mention the amount of money his company borrowed. However, JP Morgan and Goldman Sachs noted that the Robinhood got millions of dollars from them, neither did they disclose the exact figure.
Just as Robinhood restrictions linger, tempered tantrums spread virally across social media platforms, whereas two other of its customers took the matter to heart. They sued the online broker because they ceased trading operations in the middle of their active stock trading.