An app called Robinhood, named after the archetype of a man who took from the rich and gave to the poor, now blocking people from taking from the rich. I hope the irony is not lost on the general public. Robinhood needs to rebrand and/or fix their internal mission statement.
Robinhood has always taken from the poor to give to the rich, they just hid it well. Take a closer look at how they are making money when they don't charge any commissions (the "shadow exchange" where HFT operations get to make money on orders placed by Robinhood's customers),
Is this right? Most of these people pumping up and holding aren't going to get paid, they are going to lose their money when the stock finally deflates. That would be the same whether they halted trading or not.
I imagine wsb people expect the stock to rise, when shorters have to buy the overinflated stock to satisfy their obligations.
Wsb people knew this and exploited it, just like a hedge fund could do. However they don't have the political power of a hedge found so are now getting screwed by only being given the ability to sell not buy.
People on wsb knew exactly what they were doing. But we're stopped because some big institutional investors don't like it.
Institutional investors exploit retail investors all the time. They don't like it when it's the other way around.
RH caused a huge price drop in a stock that a lot of their users held. At least some of them would've sold while the price was higher and in the best case for them if the squeeze worked it would've been the short sellers who would've made the losses who are mostly not on RH. This move near-guaranteed it's their users who took the bigger losses, including those that might've sold today anyway.
It was a bit more nuanced than taking from the rich to give to the poor. Robin Hood took from the tax collectors and gave the money back to those from whom the tax collectors stole.
