Article: Robinhood Gets Ready for the Meme Stock World It Created

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Robinhood Gets Ready for the Meme Stock World It Created

Annie Massa, 14 July 2021

Hi all, it’s Annie from Bloomberg’s investing team. Soon, Robinhood Markets Inc. will go public. The debut—which could happen in the coming weeks—will see Robinhood entrust its share price to the same retail investors who have been using its app to roil markets.

The free stock trading app has been around for eight eventful years. During the pandemic, Robinhood traders congregated on Reddit message boards and drove wild swings in the price of companies like GameStop Corp. and AMC Entertainment Holdings Inc. Then, when Robinhood put limits on customer purchases of those stocks, the startup incurred social media wrath, along with some lawsuits. Continue reading “Article: Robinhood Gets Ready for the Meme Stock World It Created”

Article: Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records

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Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records

Jesse Westbrook, 02 July 2021

Robinhood Markets Inc., dogged by fines and regulatory scrutiny, revealed several new inquires from state and federal watchdogs as it seeks to sell shares in one of the year’s most anticipated public offerings.

Among the fresh disclosures made in its registration statement: U.S. prosecutors demanded access to Chief Executive Officer Vlad Tenev’s mobile phone, New York is poised to penalize the brokerage for alleged money-laundering lapses and brokerage regulators called it out for not reporting trades. Continue reading “Article: Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records”

Article: How the GameStop Hustle Worked

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How the GameStop Hustle Worked

Lucy Komisar, 22 June 2021

I have written previously for the Prospect about the frenzy over GameStop (GME), the video game and electronics company. By now, you know the story. Millions of retail investors made the stock soar by over 1,000 percent in January 2021. This brought disaster upon a handful of hedge funds that had bet on GameStop’s stock to drop. According to Markets Insider, one analyst estimated losses in February of roughly $19 billion. The hedge fund Melvin Capital reportedly closed out its position after taking a drubbing of 51 percent. Another fund, Maplelane, lost 40 percent.

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Article: What Traders Need To Know About GameStop And Naked Short Selling

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What Traders Need To Know About GameStop And Naked Short Selling

Melanie Schaffer, 03 June 2021

This week and last, AMC was targeted again and its shares skyrocketed 496% between May 24 and June 2 before retracing Thursday.

What Happened: The squeeze in GameStop was caused by retail and institutional traders rushing into the stock, and some hedge funds covering their short positions, which drove the price up to astronomical levels. Robinhood and a number of other brokers then restricted trading and caused an illiquidity event that dropped its stock down almost 90% over the following nine days. Continue reading “Article: What Traders Need To Know About GameStop And Naked Short Selling”

Article: Robinhood drops the confetti, but advisers aren’t convinced

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Robinhood drops the confetti, but advisers aren’t convinced

Nicole Casperson, 06 April 2021

This week millions of Robinhood users may have noticed that the celebratory confetti graphics that used to rain down after each trade have been replaced with images of floating geometric shapes, according to an announcement from the company last Wednesday. Robinhood also changed the images it displays when a customer signs up for premium service Robinhood Gold or deposits money on the app.

The app’s infamous confetti graphic garnered heavy criticism of its gamification strategy during a Feb. 18 congressional hearing where Chief Executive Vlad Tenev testified. Continue reading “Article: Robinhood drops the confetti, but advisers aren’t convinced”

Article: Robinhood Restricted-Trading Suits Will Play Out In Florida

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Robinhood Restricted-Trading Suits Will Play Out In Florida

Elise Hansen, 02 April 2021

Dozens of lawsuits against stock-trading app Robinhood over its move to block users from buying shares of GameStop and other volatile stocks will be centralized and moved to the Southern District of Florida, the U.S. Judicial Panel on Multidistrict Litigation said.

Panel Chair Karen K. Caldwell said Thursday that even though the suits have varied defendants and legal claims, there’s enough common ground to centralize the cases. Many of the plaintiffs and all of the defendants supported centralization, the order noted. Continue reading “Article: Robinhood Restricted-Trading Suits Will Play Out In Florida”

Article: Melvin Capital Is Facing Nine Lawsuits Related to the GameStop Frenzy

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Melvin Capital Is Facing Nine Lawsuits Related to the GameStop Frenzy

Michelle Celarier, Institutional Investor, 22 March 2021

Gabriel Plotkin’s Melvin Capital, the hedge fund at the center of the GameStop trading frenzy in January, is a defendant in nine lawsuits by retail investors alleging a conspiracy to limit trading that caused them to lose money.

The hedge fund revealed the existence of the lawsuits in its annual ADV filing with the Securities and Exchange Commission.

Melvin was famously short GameStop and lost more than 50 percent during January following a short squeeze orchestrated by a Reddit forum called WallStreetBets, whose members included retail investors in GameStop. As the stock soared, various online brokerages catering to those investors, including Robinhood, restricted buying shares of GameStop, among other stocks heavily shorted by Melvin.

Article: 77% of people surveyed believe Robinhood’s restriction of meme stocks during the GameStop frenzy was market manipulation, new report finds

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77% of people surveyed believe Robinhood’s restriction of meme stocks during the GameStop frenzy was market manipulation, new report finds

Isabelle Lee, 01 March 2021

A survey by data analytics firm Invisibly found that 77% of people believe Robinhood’s restriction of certain stocks at the peak of the Reddit-fueled frenzy amounts to market manipulation.

Commission-free trading app Robinhood has faced significant backlash and scrutiny in the weeks since January’s Reddit-fueled short squeeze, with CEO Vlad Tenev grilled by legislators at February’s congressional hearing over the company’s decision to restrict buying of many of the “meme stocks” at the heart of the saga.

The move took the wind out of the momentum trade, and marked the end of January’s retail trader phenomenon.
Now, a recent study by data analytics from Invisibly found that a majority of people surveyed believe Robinhood’s restriction of meme stocks was market manipulation.

The study, which surveyed 1,300 people during the first week of February, also revealed that 39% felt the market mania was “exciting and good” for investors, while 17% felt it was “exciting but a bad investment.”

28% said the trading phenomenon was a positive event, and “shaking things up from time to time is a good thing”, while 15% felt it was detrimental to markets. Meanwhile, 40% of respondents believe that Robinhood and other retail trading services restricted some stocks to help hedge funds.

The survey paints a stark picture of the public’s perception of what transpired in late January, despite Robinhood stating that it restricted trading of some stocks due to clearinghouse requirements.

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Article: Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages

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Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages

Tyler Durden, Zero Hedge,  26 February 2021
At the center of the investigation was how Robinhood displays cash balances and buying power to its customers and the process that it undertakes to vet and approve traders for options trading. Continue reading “Article: Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages”

Article: The GameStop Mess Exposes the Naked Short Selling Scam

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The GameStop Mess Exposes the Naked Short Selling Scam

LUCY KOMISAR, 25 February 2021

At the House Financial Services Committee hearing last week on the GameStop debacle, there was an elephant in the room: naked short selling.

Short selling, effectively betting that a stock will go down, involves a trader selling shares he does not own, hoping to buy them back at a lower price to make money on the spread. The trader is supposed to locate (or have a “reasonable belief” he can locate) or borrow the shares in brokerage accounts, and then transfer them to the buyer within two days. This accounts for as much as 50 percent of daily trading. Continue reading “Article: The GameStop Mess Exposes the Naked Short Selling Scam”

Article: How were more than 100% of GameStop’s shares shorted?

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How were more than 100% of GameStop’s shares shorted?

John McCrank, Reuters, 18 February 2021

But Vlad Tenev, broker Robinhood’s chief executive officer, recently pointed out that some of the stocks involved in the “meme stock” rally were more than 100% shorted, implying that more shares were shorted than were available to trade.

“I just think that’s pathological,” he said on the All-In Podcast late last Friday. “You end up with this situation that could destabilize the financial markets.”

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Article: Watch Live: GameStop Hearing On Market Manipulation

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Watch Live: GameStop Hearing On Market Manipulation

Jonathan Ponciano,  18 February 2021

A Congressional hearing into the GameStop mania that triggered the largest weekly selloff since late October is underway, with some of the key players in the saga—billionaire Citadel CEO Kenneth Griffin, Robinhood CEO Vladimir Tenev, Reddit Cofounder Steve Huffman and the 34-year-old securities broker behind the Roaring Kitty online persona—all set to testify.

Committee Chair Maxine Waters (D-Mo.) kicked off the hearing by asking Tenev whether he misled investors on January 28 when he denied that Robinhood had a liquidity problem despite raising more than $3 billion in the following days to meet reserve requirements from the Securities & Exchange Commission. Continue reading “Article: Watch Live: GameStop Hearing On Market Manipulation”

Article: Explainer: How were more than 100% of GameStop’s shares shorted?

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Explainer: How were more than 100% of GameStop’s shares shorted?

John McCrank, 18 February 2021

NEW YORK (Reuters) – One area of focus from a U.S. House of Representatives panel on Thursday will likely be on the role short selling played in the GameStop market mayhem.

Executives from trading platform Robinhood and hedge funds Melvin Capital and Citadel will be grilled following the retail-driven trading frenzy that sparked wild gyrations in GameStop and other heavily shorted stocks. Continue reading “Article: Explainer: How were more than 100% of GameStop’s shares shorted?”

Article: House Hearing On GameStop Fiasco Will Focus On “Short Selling And Stock Manipulation”

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House Hearing On GameStop Fiasco Will Focus On “Short Selling And Stock Manipulation”

Tyler Durden, Zero Hedge, 16 February 2021

In order to affect change, one has to understand the problem before them. It is by those standards we can confidently say we are near-certain that this week’s upcoming congressional hearings on the GameStop fiasco will be both a useless circus and a intellectual farce.

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