Robinhood, Riding High On App Store, Halts GameStop And AMC Trades

In the midst of a stock surge that has taken the financial world by storm, the popular stock-trading site Robinhood has halted trades of the key stocks at the center of the story. This comes as the Robinhood app itself is surging in popularity, along with Reddit where the trades are being organized.

Bloomberg reports that several clients have said they’ve been unable to trade GameStop Corp. or AMC Entertainment Holdings Inc. stocks. Instead, those stocks are being given a “not supported” note. This follows a similar stoppage from TD Ameritrade.

Robinhood has now issued a statement on its policy, chalking it up to monitoring for market volatility.

“We continuously monitor the markets and make changes where necessary,” the company state. “In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK.”

There has been some calling action to be taken as the value of GameStop and AMC inflate to much higher values than normal. This is being organized by the WallStreetBets subreddit, which is intentionally taking on hedge funds and short-sellers. The subreddit briefly went private during the whole debacle. The subreddit has moved on to AMC in recent days, and the entire situation has even garnered a response from the White House.

Industry analyst Michael Pachter weighed in regarding the halting of trades, coming out against it because the Reddit users are not relying on “material nonpublic information” or making false claims. Those factors would make them potentially guilty of insider trading, but instead the entire scheme was hatched on a public forum where anyone can view it. He said restricting their access is “problematic.”

The calls for action and others have also been met with criticism, as it’s perceived as a move to protect hedge funds from losing out. This has drawn comparisons to the Wall Street bailout.

The story has been gaining attention throughout the financial world in recent days, leading to a surge of popularity in all of the surrounding applications. As analyst Daniel Ahmad pointed out, the two most downloaded apps right now are Robinhood and Reddit.