Robinhood has announced that, beginning Friday, it will allow ‘limited buys’ on restricted stocks, potentially signalling the end of a brutal day-long hold on Gamestop, AMC and other stocks.
“Starting tomorrow, we plan to allow limited buys of these securities,” the company said in a blog post. “We’ll continue to monitor the situation and may make adjustments as needed.”
On Thursday morning, Robinhood restricted purchases of Gamestop, AMC, Blackberry, and a raft of other stocks that had been driven to unusually high prices by coordinated activity on the /r/wallstreetbets subreddit. The decision to restrict purchases provoked a significant backilash, and several law-makers have called for the company to be investigated in the wake of the action.
In its statement, Robinhood emphasized that the decision to halt purchases was made because of internal risk to the company, not as a response to outside pressure from other financial actors.
“As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment,” the post argues. “To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.”
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