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by sendtown_expwy 1965 days ago
It seems like Robinhood, when it stopped trading on GME, decided to literally transfer money from the WSB retail traders to the funds who were short on the stock. But if Robinhood needed to halt trading in order to just survive as a brokerage, (and could demonstrate so), would that justify its behavior? Does anyone know more about laws and regulations concerning brokerages here?
1 comments
gruez 1965 days ago
>It seems like Robinhood, when it stopped trading on GME, decided to literally transfer money from the WSB retail traders to the funds who were short on the stock.

what?

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joncrane 1965 days ago
Preventing purchase orders would cause the stock price to go down.

The funds short the stock gain wealth from the stock price declining.

Holders of the stock lose wealth. Clients who want to buy "lose" the opportunity to gain wealth.

The suspension of the ability to buy into the hype absolutely hurt the long folks (mostly retail WSB types) and helped the short folks (the big hedge funds which are short GME).

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