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Because it is the equivalent of "we literally don't have enough money in the bank to allow you to trade on these". Which will be a very problematic statement fo
by Justsignedup 6y ago
Because it is the equivalent of "we literally don't have enough money in the bank to allow you to trade on these". Which will be a very problematic statement for a trade broker. The equivalent of panic if too many people withdraw from a bank.
Few people are actually getting this information. So... its not horrible press for them.
And if they say this. People would sue like MAD. Because it would be "RH didn't have enough money to trade on a thing they allow trading on. Therefore we missed out on potentially 5 million in profits when I was unable to trade ..." and so the lawsuits begin.
- deleted 6y ago[deleted]
- g9yuayon 6y agoI can accept that they ran out of cash. It's just like a company running out of servers when traffic spiked. On the other hand, moralizing their decision and citing misinformation and user-caring erodes trust.
- fny 6y agoI can't. They all saw this coming from at least two days before, and they managed to fix this problem with a trading session. Rather than freeze the entire market on GME so no one could buy or sell, institutional traders were free to buy out of their positions while retail accounts were being liquidated in a coordinated fashion across all brokerages. It's very clear to me that insiders saw the how much hurt this short squeeze would bring the financial markets, and they all coordinated to relieve it. It's no coincidence so many hedge funds started degrossing, futures were down, and the VIX spiked to the moon exactly as $GME's price started accelerating... ...once brokerages bricked buying the VIX collapsed and markets rose. Infinity squeeze averted and all's well in Wall Street. No big institution is likely at risk anymore and retail traders along with smaller funds will be the bagholders.
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- malandrew 6y ago> It's very clear to me that insiders saw the how much hurt this short squeeze would bring the financial markets Maybe. But if this is a trolly car problem it's clear they made the call to let the train run down the track with the retail investor when it should have been the track that eviscerated Citron and Melvin and all their backers. Big institutions that made the bad trades should have been the bagholders.
- bogidon 6y agoHmmm. How many companies claim to put users first? And of those how many actually do? Oh right. I would not put a fintech in charge of said trolley.
- amluto 6y agoWho is “they”? Unless I’m very much mistaken, Robinhood has no institutional clients. The institutional clients as well as the more serious retail clients were unaffected. It would be quite odd to halt trading on a stock market-wide because a small number of brokers run out of collateral.
- themihai 6y agoStop being "less smart". Robinhood's clients are/is a hedge fund manager, Citadel Securities - Robinhood’s largest customer, which tried to bail out Melvin Capital which got bankrupted in the short squeeze on GME. Unless you've lived under a rock you should know by now how Robinhood is making the money.
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- mrep 6y agoLol, so instead, most of the internet thinks they are colluding with institutional short sellers at hedge funds in order to save them and screw over retail investors. They already had (probably in spam detection right now as they are currently gone) hundreds of thousands of 1 star reviews on the android star and tons of people like me deleting their app. Oh, and I heard they were supposed to IPO this quarter and I can see this event single handedly completely derailing that with how many users they are going to lose.
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- JumpCrisscross 6y ago> instead, most of the internet thinks they are colluding with institutional short sellers at hedge funds in order to save them and screw over retail investors Communications were undeniably terrible. That said, I imagine they have a limited number of people on staff with deep clearing knowledge, and those people were preoccupied. Aviate, Navigate, Communicate.
- 0_gravitas 6y agoI'm sorry but I absolutely cannot buy this (just like $GME); I see Hanlon's razor weaponized like this constantly and I think we've long passed the point of violating Occam's.
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- Aeolun 6y ago> I imagine they have a limited number of people on staff with deep clearing knowledge Since you just gave us the basics in like 5 minutes, is it too much to expect that people whose job it literally is know that too? Especially the ones doing communications.
- JumpCrisscross 6y ago
- mannykannot 6y agoThere will be a lot of talk about sueing, some of it will result in litigation, and probably a few people will have some of what they thought they had taken from them restored - but none of this will result in RobinHood, or any other company, becoming the frictionless, almost-free trading platform they imagined it was.
- elliekelly 6y ago> the frictionless, almost-free trading platform they imagined it was Maybe we all should stop to consider whether free & frictionless are worthwhile aspirations. Ice has a lot less friction than concrete but I certainly don’t want to walk to work on it. Maybe a little bit of friction in our news, investments, social media, communications, etc. is a good thing. Give our brains a chance to digest information and let the intelligent & cooler minds prevail rather than impulsively smashing the share or downvote button.
- sacred_numbers 6y agoThe problem is that Wall Street has access to, if not free, practically frictionless trading in comparison to retail investors. If you add more friction to retail investors but not Wall Street it just compounds the problem.
- lovecg 6y agoSo let’s do it across the board. Slow everything down to sane levels. Won’t happen but one can dream...
- adrr 6y agoYou do realize most hedgefunds lose money and that active trading isnt as effective as just buying and holding shares in index funds. This is Warren Buffets famous bet. What WH has democratized is now giving retail investors the opportunity to also lose money with active trading.
- cfors 6y agoTech companies do this all the time when the cheap servers they run their businesses on can't handle the traffic. I find it hard to believe that anybody would find it hard to empathize with the fact that your company failed to predict a wild meme craze leading to an overload of your systems. Now that its said, it would have made more sense for Robinhood to just nuke its servers and return 500s to their users rather than deal with this whole mess.
- deleted 6y ago[deleted]
- loycombinate 6y agoThen they should have halted both buy AND sell, just like the NYSE, but they made it sell only instead.
- Semaphor 6y agoHave you not read about the fire they were under a while ago for making it too easy for people to lose money? Making it so people would be stuck in their positions would be insane, way more than their current actions.
- loycombinate 6y agoThe stock dropped right after they banned buying. It would have kept going up otherwise.
- dodobirdlord 6y agoPreventing their users from selling out of a position would be much, much more serious than preventing them from adding to a position. Incomparably so.
- dmurray 6y agoThey stopped both buying and selling, except to close existing positions.
- minusSeven 6y agoIf that is the case the way it supposed to happen is a directive from regulator body(SEC maybe) should go out saying stop trading of this shares. Lack of regulations and no word on why certain shares are not tradable isn't acceptable and you can't blame people from making their own theories.