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Recently, online stock trading platform Robinhood prevented retail investors from continuing to buy GameStop, sparking market attention and sparking discussions in the free market. However, there are new reports of red shirt capital and pressure. politics behind this.
Recently, GameStop (NYSE: GME) share price in American games increased by 135% due to retail investors. He beat the Wall Street hedge funds and achieved an epic short crunch, causing him to lose nearly $ 5 billion. Trading platforms banned purchases, causing their share price to plummet. This has caused more serious problems, and many public opinions doubt that stock trading is now in the hands of Wall Street capitalists, and retail investors can only win but not lose. Although the US Securities Regulatory Commission has also recommended a suspension of trading, this is not the same as selling or not buying, and it has been criticized by the media as an embarrassment.
This is unacceptable.
Now we need to know more about @RobinhoodAppdecision to prevent retail investors from buying stocks while hedge funds are free to trade the stocks as they see fit.
As a member of the Financial Services Committee, I would support a hearing if necessary. https://t.co/4Qyrolgzyt
– Alexandria Ocasio-Cortez (@AOC) January 28, 2021
These views are permeating and have raised political concern. At present, some members of Congress have requested a hearing. Although Robinhood insists that it is protecting retail investors, it should limit the purchase of these 13 stocks, including GameStop, AMC and Nokia. His board also stated that it has not received any external pressure, nor does it intend to admit errors. But now, there are new reports on the internet that the move is due to pressure from Sequoia Capital and the White House.
This once again ignited the anger of the people, believing that the conspiracy of the capitalists is behind it. Funding for Robinhood last year was led by Sequoia Capital, a global venture capital joint venture between China and the United States with funds located in China, India and the United States, which is quite influential. Therefore, after the rumors fermented, Sequoia Capital immediately came forward to clarify that this matter has nothing to do with it and that they will not interfere with the operation of Robinhood. Conspiracy theories aside, there are still many debatable things behind it, including the most fundamental ones, whether these platform operators really have the right to do so.
So far, the news of you, who claimed to be Robinhood’s in-house engineer, doesn’t have much credibility. According to a third-party investigation, the Odin19199 account was only established on January 28 of this year and there were hardly any leads available in the article, but an hour after posting it was immediately republished and promoted. Rationally speaking, it is not credible, but many people are still willing to believe and republish, out of anger, because doubts of injustice exist, showing how easy it is to exaggerate rumors on popular topics.
This type of restraining order to buy is not the first time in history, A shares have appeared many times, but it is still very controversial behavior. It is worth noting that the new US government has just come to power, and indeed there are still many opponents. Although GME’s stock price has reversed after the market, if this problem continues to ferment, it may not only reappear against Wall Street, but it may also cause conflicts in political consciousness, which deserves follow-up attention.
(Source of the first image: Flickr / Michael Fleshman CC BY 2.0)
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