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It's bizarre to me how many people really seem to have sided with Robinhood on this and blame the consumer's for being "too dumb to understand the reality of wh
by ar_lan 4y ago
It's bizarre to me how many people really seem to have sided with Robinhood on this and blame the consumer's for being "too dumb to understand the reality of what happened."
Situations occur, and usually customers are receptive if they are given heads up and a reason why. But Robinhood just completely subverted their customer's expectations rapidly and unexpectedly. The entire purpose of their app is TO abstract away the complicated world of stock trading - and they failed to live up to that goal during the GME saga. So I don't get why people are going against the customers whose expectations were set by Robinhood and coming to the defense of Robinhood themselves.
Robinhood offered a product. They clearly showed they can't deliver on the expectation most consumers desire. People vote with their money, and are leaving Robinhood (I cancelled in favor of Fidelity in February 2021). It's fine, it's how capitalism works.
- WoahNoun 4y agoThey've been pretty open actually. They did not have enough cash on hand to support the buy volume. They have said this repeatedly. They have also said if incoming bank transfers from retail investors had settled faster they would have had enough cash. The "instant deposit" feature of letting people buy stocks with cash deposits they had only initiated but had not settled meant they didn't have the cash on hand to support more buying.
- mazlix 4y agoJanuary 27th, 2021 Robinhood sent me an email warning that "In an effort to help reduce risk, we've begun implmenting certain restrictions for GME and AMC options trading". They explain some restrictions being made to options. They don't provide any sort of warning that completely removing the ability to buy the underlying stock for all of their users was even a possibility. I think it sshould be part of their fiduciary duty to inform people of the risks of purchasing stocks that they are running out of collateral for.
- WoahNoun 4y ago> inform people of the risks of purchasing stocks that they are running out of collateral People weren't allowed to purchase those stocks so I'm not sure what risks you are talking about. There was no (additional) risk from purchasing from RH versus anywhere else. You could always sell. Not allowing people to buy doesn't have anything to do with fiduciary duty. A broker doesn't have to let you buy whatever you want.