Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Investors file CLASS ACTION SUIT against Robinhood over GameStop ‘stonk’ suppression

Investors file CLASS ACTION SUIT against Robinhood over GameStop ‘stonk’ suppression

A group of investors has filed a class action complaint against the online brokerage Robinhood, after it stopped all buys of GameStop and other stocks. They call it a market manipulation aimed to protect short-selling hedge funds.

According to the lawsuit, filed on Thursday before a federal judge in the Southern District of New York, Robinhood “purposefully, willingly and knowingly” deprived retail investors of the ability to invest, accusing the brokerage of “manipulating” the market.


Robinhood “completely blocked retail investors” from buying GameStop stock “for no legitimate reason,” the lawsuit goes on to say, adding that the move appears to be calculated to benefit individuals and institutions who are not Robinhood customers but are “large institutional investors” into the company.

The plaintiffs are asking for an immediate injunction to reinstate GameStop stocks on Robinhood’s platform, and unspecified damages and punitive fees.

As the result of the block, GameStop stock fell from $469 a share on Thursday morning to only $126 by 11:20 am. It has since rallied back to $275 territory, but remains volatile.

Robinhood customers woke up on Thursday to an announcement they were no longer able to buy stocks of GameStop (GMEA), AMC Theaters (AMC), Blackberry (BB) or Nokia (NOK). The four companies were targets of retail investors congregating on Reddit over the past several weeks.

These investors sought to drive up the stock price of the companies in order to punish hedge funds who had been “short-selling” them to make a quick profit. The rise in stock prices caused the funds to lose billions.

Short sellers reportedly lost $14.3 billion on Wednesday alone, with one fund, Melvin Capital, requiring nearly $3 billion in bailouts to avoid bankruptcy. One of the firms that bailed out Melvin Capital, Citadel Securities, also facilitates trades made on Robinhood, working as a sort of middleman between the app and Wall Street’s exchanges.

Halting the buying – but not the selling – of the four companies’ stock meant that its price could only go down, thus helping the hedge funds.

 
There were reports that other brokerages such as WeBull have also disabled buying of GameStop and other “stonks” – a Reddit meme reference to common people trying to profit from the stock market.


While the retail investors may or may not have profited from buying stocks, the short-sellers are feeling the pain. GameStop stock surging by 1,000 percent appears to have inspired other retail investors into similar campaigns with other companies. Data analytics firm Ortex said Thursday that short-sellers have racked up $70.87 billion in losses just this month, with over 5,000 US firms holding losing shorts as of Wednesday.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×