There is growing concern over Robinhood’s steps that prevented trading.
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Elon Musk came out in support of Rep. Alexandria Ocasio-Cortez after she called out day trading app Robinhood’s decision to halt the trading of GameStop stock.AOC tweeted in part, “We now need 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. As a member of the Financial Services Cmte, I’d support a hearing if necessary.”Absolutely— Elon Musk (@elonmusk) January 28, 2021Musk replied: “Absolutely” and later gave his own take, writing:u can’t sell houses u don’t ownu can’t sell cars u don’t ownbut u *can* sell stock u don’t own!?this is bs – shorting is a scam legal only for vestigial reasonsRelated: How Reddit Day Traders Are Using the Platform to Upend the Stock Market and Make Money in the Processu can’t sell houses u don’t ownu can’t sell cars u don’t ownbutu *can* sell stock u don’t own!?this is bs – shorting is a scamlegal only for vestigial reasons— Elon Musk (@elonmusk) January 28, 2021Day-traders who organized on Reddit to buy GameStep shares drove the price up dramatically, hurting hedge funds that had shorted the stock. Per CNET, GameStop shares spiked to $467 and crashed to $126 when it became impossible for investors to buy more shares. The stock’s price closed at $193.60 on Thursday.A class-action lawsuit was filed in the Southern District of New York, claiming that the day-trading app “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise thereby deprived retail investors of the ability to invest in the open-market and manipulating the open-market.”