Photo: Drew Angerer/Getty Images
On Thursday morning, the popular stock-trading app Robinhood abruptly stopped many of its users from buying and selling shares of GameStop, Blockbuster Video, and other companies that its users have flocked to en masse this week. The drastic move, which other trading platforms followed, was a reaction to the market mania around those stocks, which have surged to dizzyingly irrational heights during an extended buying frenzy driven by Reddit-fueled, anti-establishment traders.
GameStop’s stock plummeted on Thursday, along with others that have seen huge gains, in what many saw as an inevitable reckoning. In the meantime, the backlash to Robinhood’s decision intensified. Many took issue with the idea that the app, and others like it, would protect powerful hedge funds from further market exposure, and did not find the company’s explanation for its actions — which cited “market volatility” — convincing. (The company is already the target of a class-action lawsuit.) And the sense of indignation bridged the political divide, uniting populists, or those who style themselves that way, on the left and right.
Representative Alexandria Ocasio-Cortez called the move “unacceptable” on Twitter, and endorsed holding a hearing to look into it. Senator Ted Cruz offered his help on the matter (to which AOC replied that she did not want to work for him because “you almost had me murdered 3 weeks ago”). Senator Elizabeth Warren told CNBC: “The billionaires and some hedge funds are yelling because they’re not…the only ones who make money when the manipulation works.” Barstool Sports CEO Dave Portnoy, a prominent day-trader and favorite of the Trump clan, endorsed prison time for Robinhood executives. And an army of young, often left-leaning users on Twitter, Reddit, and other platforms cried foul, and tanked Robinhood’s app-store ratings.
By mid-afternoon, Democratic Senator Sherrod Brown had announced that he would convene a Senate hearing on the “the current state of the stock market. (The House is expected to follow suit.) In a statement that did not mention GameStop, Brown asserted that “people on Wall Street only care about the rules when they’re the ones getting hurt” and “that it’s time for the SEC and Congress to make the economy work for everyone not just Wall Street.” Though his comment was vague, the involvement of the chairman of the U.S. Senate Committee on Banking suggests that the ramifications of a deeply bizarre week on Wall Street are only beginning.