![]() ![]() “Inquiries into freezes should not be limited solely to Robinhood. As a member of the Financial Services Cmte, I’d support a hearing if necessary (sic),” Ocasio-Cortez said in a tweet. We now need to know more about decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. Read | Explained: Why GameStop’s stock surge is shaking Wall Street Musk tweeted his approval after Ocasio-Cortez, often referred to as AOC, sought a US House of Representatives’ Financial Services Committee hearing on Robinhood’s decision to halt trading of the GameStop stock. On January 28, billionaire Elon Musk joined the growing number of public figures supporting United States Representative Alexandria Ocasio-Cortez's call for inquiry against Robinhood. The clamp down has been heavily criticised. It said that additional restrictions on trades of GameStop, among other companies, were necessary to ensure it did not run afoul of government regulations. ![]() Robinhood's move to limit buying of some securities led to GameStop’s shares plummeting 75 percent in 90 minutes. Thus, they headed to California to build a financial product that would “enable everyone” to access financial markets. “There, they discovered that big Wall Street firms were paying next-to-nothing to trade stocks, while most Americans were charged commissions for every single trade,” the website adds. ![]() Talking about Robinhood’s genesis, the company website says Bhatt and Tenev built two financial companies in New York sold their trading software to hedge funds. In his mid-30s, Bhatt is a billionaire, thanks to Robinhood’s valuation of $11.2 billion (August 2020). Read | GameStop saga: All that has happened so farīorn to Indian immigrants, Bhatt is a first-generation American who studied physics at Stanford University before earning a master's degree in mathematics in 2008. On its website, the company states its motto as: “financial system should be built to work for everyone”. The platform is believed to have had 13 million users in 2020. Robinhood’s revenue comes from interest earned on customers' cash balances, margin lending and selling order information to high-frequency traders. Both of them are now co-chief executive officers of the company. It was founded in April 2013 by Vladimir Tenev and Indian American Baiju Bhatt. The company is headquartered in Menlo Park, California. Robinhood is a broker-dealer registered with the United States Securities and Exchange Commission. Robinhood is a trading platform operated by American financial services company Robinhood Markets Inc. These investors complained that the platforms that "democratised" trading were now assisting Wall Street, which they blame for recession, excesses and getting bailed out through taxpayers' money.Īlso read: Zerodha CEO Nithin Kamath on GameStop, short squeeze and why Indian investors have nothing to fear The new limits on trading introduced by Robinhood and other online platforms set off howls of protest among small traders, whose numbers have multiplied especially during lockdown. ![]() The subsequent rally in the struggling video game retailer's stock and others hit hedge funds, which had heavily shorted these shares, hard. The online day traders hoped to challenge Wall Street’s dominance. Some day traders had gotten together on social news aggregation website Reddit and bought shares and options in large numbers. This came a day after GameStop’s share price increased 135 percent. ![]()
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