Robinhood restricted trading in several growing stocks, including GameStop (NASDAQ: GME) and AMC on Thursday. CEO of Tesla (NASDAQ: TSLA) and richest man in the world Elon Musk questioned Robinhood’s latest move — Robinhood’s co-founder Vlad Tenev replied to Musk’s questions in invitation-only app Clubhouse.
GameStop shares rose 1,500% since the start of 2021. The rally was led by Reddit board WallStreetBets. However, Robinhood halted trading in the stock, alongside several other stocks that were gaining remarkable price increase.
“We knew this was a bad outcome for customers. They get pissed off if they’re holding stock and they want to sell it but can’t. ” Tenev said.
Consequently, Robinhood faced an angry reaction by traders after the company halted trading while the market was facing highly volatile times — preventing traders from opening new positions in the stock, and only limiting selling. Nevertheless, Robinhood’s chief executive Vlad Tenev claimed that the reason behind the decision is that the company was raising more money to cover the trading costs.