It's been a wild week at Robinhood.
On Thursday990 Archives the company announced it will start allowing customers to buy GameStop shares on Friday.
Robinhood halted buying for several stocks — including GameStop, AMC, BlackBerry, and Nokia — on Wednesday, citing high volatility. Notably, these are the stocks that have gotten in the crosshairs of Reddit investor group r/wallstreetbets, who are buying them en masse and betting against massive hedge funds that have been relentlessly shorting (selling in anticipation of buying cheaper later) these stocks in recent months and years (read the whole saga here).
This didn't sit well with customers, who started leaving the platform and moving to other trading apps. Deliberately or not, Robinhood's move was helping GameStop shorters, as it stopped millions of traders from driving the price of GameStop higher up.
Now, Robinhood explains this was not the case.
"Amid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment," the company wrote in a blog post. "To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to."
SEE ALSO: Here are the best investing app alternatives to RobinhoodAccording to The New York Times, Robinhood also raised $1 billion from its investors, in order to better cope with the high volume, it has recently said.
Initially, Robinhood will only allow "limited buys" of the restricted securities, with details available here. The company says it'll keep monitoring market conditions, and eventually restore full trading for these securities.
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