By Caleb Setlock
It is not often that AOC, Bernie Sanders, Ted Cruz, and Donald Trump Jr. agree on something, but all took to Twitter on Thursday to condemn several stock brokerages for perceived stock market manipulation.
Thursday morning, Robinhood, an online brokerage modeled to help the retail investor, and Webull were two popular platforms that stopped the purchasing of GameStop, AMC, Koss, Blackberry, Nokia, and other small stocks on their site. However, there were no limitations on selling these stocks in an effort to help hedge funds close out their short position. In effect, the retail investor could sell their positions in these companies, if they owned any, but not purchase new ones. Other brokerages including Interactive Brokers, Charles Schwab, and TD Ameritrade all imposed similar restrictions by limiting who could buy. All firms cite extraordinary volatility in the markets as the main concern.
Thursday was a rough day online for brokerages in the eyes of public perception. Lawmakers, rappers, sports media personnel, sports reporters, and millions of other people took to Twitter to voice their opinion on these brokerages (mainly Robinhood) suspending their trading on certain stocks and ruining what they thought was a free market. Public mistrust in the stock market and its players has not been this high since the housing market collapse over a decade ago.
This all comes as a result of GameStop’s saga, $GME, which share price is above $193.00 Friday morning and at its highest was well above $400.00 per share, up 14,300% from merely a week ago. GameStop’s stock has become a war battleground between Wall Street and internet retail traders, thanks to the help of Reddit, an online social media platform. Thousands of retail investors noticed massive short positions taken by billionaire-run hedge funds and what seemingly started as a prank, has turned into a moral and economic battle, bigger than GameStop, between the top 1% and the common retail investor. Several different hedge funds have reported losses surpassing tens of billions of dollars. Friday morning, Robinhood and other firms announced an intention to resume purchasing power of the previously suspended stocks, but under limited matters and strict scrutiny.
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