After a week that has seen the price of so-called "meme stocks" driven up by a determined community of Reddit users, a number of trading platforms hit back on Thursday by preventing people from buying shares in certain companies, including GameStop.
GameStop has been the poster child for the effort led by the Reddit group r/WallStreetBets, a collective of retail investors who have been driving up the prices of certain stocks, calling the bluff of hedge funds and institutional investors who have bet on the stocks decreasing in value – otherwise known as "shorting."
On Thursday, app-based trading platform Robinhood suspended purchases in GameStop (GME) and several other companies that had attracted investment from WallStreetBets including AMC, Blackberry (BB) Naked Brand Group (NAKD), Express (EXPR), Nokia (NOK), Koss (KOSS), and Sundial Growers (SNDL).
This meant that those holding the stocks could only sell them, not buy more, stymying efforts to increase their stock prices further, which is being interpreted as a concession to some of the institutional investors who stand to lose billions after "shorting" the companies, giving them an opportunity to limit their losses.
Several other brokers have suspended purchases in GameStop and some of the other "meme stocks," sparking consternation from commentators and apparently uniting politicians both left and right.
Progressive Democratic Rep. Alexandria Ocasio-Cortez, Donald Trump Jr., and under-fire U.S. Sen. Ted Cruz are among those who have criticized Robinhood for the decision to suspend purchases in GameStop and other stocks, arguing it is siding with Wall Street over American consumers.
If you want a decent explainer on what has happened with GameStop and how it is causing consternation in Wall Street, read this guide from Vice.
The decision by Robinhood to suspend trading is proving particularly ironic considering it describes itself as "democratizing finance for all."
This tweet from 2016 is now being shared liberally, while #deleterobinhood is trending.