Last week, the stock market had its worst week since October, but if you had GameStop stock, you were feeling pretty good. It grew 400 percent, fueled by the Reddit page r/WallStreetBets, where members bought stocks of companies that appeared on the way down, inflating their prices and putting the hedge fund managers who had shorted the stock in a bad position.
Robinhood stopped the trading on some of these stocks last week while it raised enough capital to cover certain clearing requirements associated with the trades. But users saw the move as an effort to curb the gains made in stocks like GameStop and AMC, allowing hedge funds a way out of their positions. There were even allegations that Robinhood was closing out positions on behalf of its retail investors, essentially forcing them to sell their stock. On Monday, the company allowed trading to resume.
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