Robinhood on Friday will again “allow limited buys” of shares in GameStop and other companies boosted by market-roiling Reddit users, according to the stock trading app’s co-founder.
Vladimir Tenev tweeted the update Thursday afternoon, hours after Robinhood froze purchases of shares in the companies during another wild day on Wall Street, a move that provoked widespread outrage and multiple lawsuits.
“Starting tomorrow, we plan to allow limited buys of these securities,” wrote Tenev. “We’ll continue to monitor the situation and make adjustments as needed.”
Thursday’s freeze came after amateur investors, many linked to Reddit forum r/WallStreetBets, began buying up shares of brick-and-mortar video game retailer GameStop and other ebbing companies in a shot at large hedge funds that had been shorting the businesses.
In the lengthy thread, Tenev went on to attempt to explain why Robinhood took the extreme step of restricting the transactions.
“As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits,” he wrote. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.
“These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today,” Tenev continued. “To be clear, this decision was not made on the direction of any market maker we route to or other market participants.”
Tenev closed by reassuring Robinhood’s users that it was committed to ensuring greater ease of access to playing the markets.
“We stand in support of you, our customers,” he wrote. “Democratizing finance for all means giving more people access, not less.”
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