Recently, stock trading app Robinhood decided to prohibit the trading of GME, KOSS, and stocks backed by Reddit. While Robinhood continues to allow users on the app to sell GME, it has put a restriction on them buying it. The company justified the ban by stating they had to take this action because of the “ongoing volatility”.
This decision taken by Robinhood resulted in a huge controversy and now, a newly released petition is urging Apple to get Robinhood removed from its App Store.
Earlier this month, WallStreetBets’ users moved around a bunch of stocks, that were short-changed by hedge funds, to abnormally high prices. All this chaos resulted in Robinhood, along with a host of other trading services, enforcing a ban on the trades of those stokes. “Volatility” was cited as the reason behind this action.
On Thursday, a Change.org petition put pressure on Apple to get Robinhood removed from its App Store for getting involved in “illegal, fraudulent, or manipulative activity”. The argument against Robinhood is that the company is trying to discourage trading by individual investors controlling the market in a bid to favor large hedge funds.
In a recently published blog post, Robinhood branded this step taken by them as a “risk management decision”. The trading firm also said that it would carry on with its endeavors to monitor the situation and make necessary adjustments according to the situation.
Though it’s been a short while since Robinhood announced this decision, the company is already diverting from its position. According to a news report published in The Verge, the company will enable limited purchases on restricted stocks like Nokia, GameStop, BlackBerry, and Nokia.
Interestingly, Robinhood is not the only app that has banned the trades of stocks by Redditor. In the past, platforms like E-Trade and Public also enforced a ban on them. However, as it turns out, Robinhood is the one that has been caught in the line of fire. The aforementioned decision by the app has received severe criticism and has not been taken kindly by the trading community. Multiple lawsuits, it seems, is just the beginning of the difficult journey it is set to have in the near future.
As the news of the stock freeze reached far and beyond, a large number of users started posting negative reviews on Robinhood’s pages floating on the Google Play Store. It hasn’t affected Robinhood’s listing on the App Store yet. This has, in turn, made people wonder whether is Apple is censoring or controlling negative reviews in any way.