They're allowing the stock to sell, they only disabled purchases. This will clearly make the stock go back down, benefiting Robinhood's investors over their users.
let's try and keep this in perspective and avoid jumping to wild conclusions based on someone tweeting a screen shot.
First, Robinhood does not make the market or fulfill the orders, so if their market-maker has no one selling a stock they have little option other than stopping people from making purchase orders. You need both sides for a liquid market.
Second, IF these are margin positions then it is not only allowed and legal but also typical for the broker lending on margin to close out the position unilaterally. IF these are cash positions it is a completely different story.
If their market makers are preventing people from selling a stock surely they must prevent customers from selling stocks, right? But you can freely sell the stock.
This is what's pissing me off. I had a tiny "fuck it" position on BB with a stop-loss that kicked in. Now I can't get back in at the lower price and the one way ban is likely why the stock fell under my sell price.
No warning from Robinhood on the current issue either or I would have pulled my sell order.
First, Robinhood does not make the market or fulfill the orders, so if their market-maker has no one selling a stock they have little option other than stopping people from making purchase orders. You need both sides for a liquid market.
Second, IF these are margin positions then it is not only allowed and legal but also typical for the broker lending on margin to close out the position unilaterally. IF these are cash positions it is a completely different story.