Robinhood Banning of GME, AMC, and Others on the NYSE is Unamerican



A GameStop store in Los Angeles. (Dania Maxwell/Los Angeles Times/TNS)

Ethan Melendi, Assistant Sports Editor

Last week, the stock trading app Robinhood banned trading GameStop, and AMC stocks due to small investors from the Internet community Reddit uniting together in an effort to destroy major Wall Street hedge funds.

These “Redditors” all bought failing stocks, such as brick-and-mortar video game retailer GameStop and the once popular movie theater chain AMC. The major hedge funds short sold these stocks, meaning they borrowed shares and immediately sold them, hoping they could buy the stock at a lower price and take the profits. Shorting stocks can be a very risky game, with the potential for both big wins or big losses. The Redditors saw this and bought loads of Gamestop and AMC stock in order to destroy these hedge funds and force them to lose a lot of money.

The Redditors argued that they did this because Wall Street has too much control, and the rich work together in order to make the most money and take everything from the average investor. In my opinion, the Redditors are absolutely correct. These hedge funds manipulate the market all the time, working together to control the price of whatever stocks they want. Now, it’s the little guys’ turn.

Robinhood is a popular trading app that many everyday people use to trade stock due to its minimal taxes and income fees, making for an easy trading experience. However, last Thursday, in response to the Redditors’ actions, the app banned users from buying stock of AMC and GameStop, only allowing users to sell their shares. Robinhood said it was because they had to meet their capital requirements, but many users saw this as a complete lie: only allowing users to sell stock is good for the hedge funds, because they can cover their shorts that way.

Following the announcement, GameStop’s stock dropped 342 dollars from $468.49 to $126.00, according to Marketwatch. To me, what Robinhood did was completely unethical, morally wrong, and perhaps most importantly, un-American.

Essentially, despite the reasons Robinhood gave for its decision, the ban was an act of controlled capitalism. Citadel is a huge hedge fund out of Chicago, IL that buys information about user stock trading, as well as personal information. This is why there are no fees on Robinhood: because they sell information, and that’s how they make most of their profits. Citadel, meanwhile, actually executes the trades, thus controlling what happens to users’ money. Robinhood restricted these trades to help big hedge funds like Citadel. Since then, there have been two class action lawsuits filed against Robinhood, and the app agreed to reopen GameStop trading on Friday.