Amid complaints from customers, at least one lawsuit and growing criticism from lawmakers in both major parties, Robinhood announced that on Friday, it plans to once again allow "limited buys" of 13 securities it had restricted on Thursday. That clampdown came after a subreddit-inspired short squeeze sent stock prices soaring for companies like GameStop, Nokia, AMC and Koss, and almost immediately rumors focused on why that happened, or who decided to put a lid on trading. On this week's episode of The Engadget Podcast, Devindra and Cherlynn spoke to Mike Futter and a member of the r/WallStreetBets subreddit to discuss exactly what is going on. Despite denials of any arrangement with big money Wall Street backers, there's still widespread belief that the inability to purchase these specific companies has been coordinated to disadvantage retail stock traders. Meanwhile, some explanations dug into what happened with the Wallstreetbets subreddit, and the business model of a company like Robinhood, pointing out that their moves caused marketmakers and hedge funds to also participate and potentially profit from the frenzy.
Jan-29-2021, 06:54:40 GMT