Written by Robert Thompson III | 1/29/21
Firstly, Robinhood has restricted trading of highly eruptive stocks on its platform, leaving its users unable to buy certain stocks. Companies affected by the restrictions are GameStop, AMC, Blackberry, Bed Bath & Beyond, Express, Koss, Naked Brand, and Nokia. Furthermore, Robinhood also lifted margin requirements for certain trades. The stocks that were removed have all surged in recent sessions as day traders united in Reddit forums like wallstreetbets and frenetically bought the names to push their share prices higher. Robinhood CEO Vlad Tenev explained on CNBC that his firm limited trading in 13 stocks Wednesday as part of an internal operational risk-management decision taken to protect the firm and its investors.
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Also, the phenomenon has already fueled massive losses for numerous hedge funds and caught the attention of regulators and the White House. Moreover, the battle between retail traders and big investors has empowered a large group of investors to find market inefficiencies and force hedge funds and others to reassess their strategies and exposure.
The professional investors had “shorted” GameStop (betting its price will collapse) along with other companies that have since soared. On the contrary, Reddit traders betted that the Gamestop stock would rise. When the stock rose the big investors lost about $5 billion dollars. In addition, one nineteen-year-old guy turned 8,000 into 80,000 when betting that GameStop would rise.
10-Year-Old Cashes in on GameStop stocks
Firstly, Jaydyn, a ten-year-old boy, get’s a handsome sum of money from his GameStop stock his mother bought for him 2 years ago. Also, For Kwanzaa 2019, Nina, Jaydyn’s mom, wanted to give her son a gift reflective of Ujamaa, one of the seven principles of the festival which focuses on cooperative economics.
Nina bought Jaydyn 10 GameStop shares for only $6 each and printed off a certificate she found online to give him something to unwrap. “Any time I learn something, I show him as well,” Nina said. “I wanted to pass on the knowledge I have now because I learned it late in life.
I want to give him a step up”. Furthermore, Nina regrets not originally having enough interest in GameStop to get stocks for herself when she bought Jaydyn’s gift. “I was not into video games, that was not my scene,” she said with a laugh. “But I’m going to let him have his win”. Meanwhile, Jaydyn started learning more and more about stocks and investing, and Roblox’s IPO caught his attention. Roblox’s IPO was delayed and is going to the stock market this year, and a lot of investors are saying that it might be a good investment.
Stocks That Are restricted on Robinhood
Since the big investors lost billions of dollars on particular stocks, Robinhood made it where you could only have a certain amount of shares in the stocks the big investors lost money from. In that case, these are stocks that Robinhood restricted.
1. Gamestop
Gamestop, the skyrocketing game store has been restricted to a limited amount of shares you can buy in Robinhood
2. AMC Entertainment
AMC Entertainment is an American movie theater located in Leawood, Kansas
3. Blackberry limited
BlackBerry Limited is a Canadian multinational company specializing in enterprise software and the Internet.
4. Nokia
Nokia is a Finnish multinational telecommunications, information technology, and consumer electronics company.
5. Express inc.
Express, Inc. is an American fashion retailer that caters mainly to young men and women.
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6. Koss
Koss is an American company that designs and manufactures headphones.
7. American Airlines
American Airlines, Inc. is a major American airline headquartered in Fort Worth, Texas.
8. Tootsie Roll
Tootsie Roll is a chocolate-flavored taffy-like candy that has been manufactured in the United States since 1907.
9. Trivago
Trivago is a German transnational technology company specializing in internet-related services and products in the hotel, also, lodging, and metasearch fields.
10. Naked Brand
Naked Brand Group is a leading intimate, apparel and swimwear company with a diverse portfolio of brands.
Conclusion
in conclusion, there have been a lot of tragedies and surprises in the stock market. Moreover, From Robinhood restrictions on certain stocks to Big investors losing billions of dollars from betting a short. However, it all comes down to your knowledge of trading and investing to determine whether you’ll succeed in it or not.
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