Vlad Tenev, managing director of troubled stock trading platform Robinhood, has denied claims that the decision to limit trading in GameStop and other stocks was influenced by institutional investors. Asked by Elon Musk in an interview this morning whether big financial institutions like Citadel Securities had conspired with regulators to quash coordinated short pressing, Tenev quickly dismissed the idea. "You're getting into conspiracy theories a bit," he says. "From our point of view, Citadel and the other market makers were not involved in this." Tenev also announced that Robinhood would ease trading restrictions on GameStop shares, which the company implemented last week in light of "market volatility," sparking speculation of a new buying frenzy when US markets open.
Robinhood Trading Restrictions
Last week, American video game retailer GameStop found itself at the center of a trading frenzy, pushing the shares to a record price of more than €450 per share. The market mania was fueled by a community of amateur traders on the r/WallStreetBets subreddit, whose goal is to push up the share price to put pressure on short sellers, who have been betting against companies. As one of the few stock trading apps designed specifically for individual traders, Robinhood has faced a tsunami of traffic and has even suffered a service outage. The platform later announced that it would halt trading in shares targeted by redditors, which also included BlackBerry, Nokia, AMC and others, after clearinghouses demanded a capital injection to offset increased trading. Users were able to sell existing shares, but were unable to purchase additional shares. The move sparked outrage among day traders and took the momentum out of the brief crisis, sending GameStop's stock price tumbling more than 40%. The stock was at €325 a share when the markets closed on Friday. In the process, a class action lawsuit was launched against Robinhood, accused of attempting to "manipulate the market for the benefit of individuals and financial institutions that were not Robinhood's customers." In an attempt to right the ship and end speculation about the incident, the company raised a billion-dollar emergency financing round from existing investors and has since lifted restrictions on a number of affected shares. According to a Robinhood blog post, the number of restricted shares has increased from 50 to 8. The shares that remain restricted are: GameStop, BlackBerry, Nokia, AMC, Express, Genius Brands International, Koss, and Naked. The website lists a maximum number of shares and option contracts that users can currently purchase, which is different for each restricted share. While the company promises to loosen these limitations imminently, Tenev has been careful to emphasize that commerce won't be fully demarcated. “We do not have infinite capital. There will always have to be a limit. through the telegraph