Temporary restrictions on GameStop, other stocks lifted by Robinhood

by Celine Castronuovo - 02/05/21 7:33 AM ET

Stock trading app Robinhood late Thursday announced that it had lifted all temporary restrictions on stocks, following days of backlash from users and lawmakers after the company placed limits on GameStop, AMC and other stocks last week.

Robinhood announced the change in a blog post on Thursday, telling app users, “There are currently no temporary limits to increasing your positions.”

The trading platform last Thursday blocked users from buying or trading stocks that had been targeted by members of the Reddit subforum r/WallStreetBets to drive up the price of stocks that traditional hedge funds have shorted, including GameStop, AMC and BlackBerry.

Robinhood, at the time, cited in its decision ongoing market volatility spurred by the rapid buying and surge of specific stocks, writing in a blog post, “In light of recent volatility, we are restricting transactions for certain securities to position closing only.”

Under the limits, Robinhood allowed users to close out existing trades, but limited investors on the platform from buying new shares.

The decision provoked bipartisan criticism from lawmakers, including Rep. Alexandria Ocasio-Cortez (D-N.Y.), who took to Twitter to call for a congressional hearing “to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.”

Robinhood CEO Vlad Tenev is now expected to testify before the House Financial Services Committee at a Feb. 18 hearing that will center on the GameStop surge, Robinhood’s response and the overall state of the stock market.

A separate Senate Banking Committee hearing is also in development.