In the wake of Robinhood’s surprise trading block, a new class of Reddit investors are looking for apps that will let them plow their money into their favorite stocks. On Thursday morning, Robinhood announced it would temporarily block investors from purchasing or trading companies including GameStop, AMC, BlackBerry, Bed Bath & Beyond, and Nokia, all of which have been the subject of unexpected rallies over the past few days.
For the online communities that fueled those rallies, the block was treated as an outright betrayal at the time of the initial ban. Discussion about switching ramped up on Twitter and in investment discords after Robinhood halted buying and trading on stock, citing “recent volatility” in the market with the aforementioned stock as the reason it prevented additional trading.
Since the decision, Robinhood’s app on the App Store has received thousands of one-star reviews as a form of practice known as review bombing. On the r/WallStreetBets subreddit, angry Robinhood users are calling for a class action lawsuit because “allowing people to only sell is the definition of market manipulation,” according to one post. There’s even a new subreddit specifically for suing the company. Another Robinhood user tweeted that after years of being on the platform, the move felt like a “slap to the face,” adding “to be regulated in a time of absolute prime opportunities is an embarrassment.”
On Twitter, beloved rapper and Fyre Fest promoter Ja Rule did not mince words: “Yo this is a fucking CRIME what @RobinhoodApp is doin.”
Robinhood has been central to much of the chaos within the financial sector over the last few days. Investors from r/WallStreetBets or its private Discord server used the personal finance app to inflate GameStop and other stocks as a blow against Wall Street hedge funds. Late Thursday afternoon, Robinhood issued a statement informing users the company would allow “limited buys of these securities,” beginning Friday. The statement says Robinhood will “continue to monitor the situation and may make adjustments as needed.” ThinkAuthority has reached out to Robinhood to determine what “limited buys” means for investors.
“To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to,” the company says. “We’re beginning to open up trading for some of these securities in a responsible manner.”
In the statement, Robinhood’s team specifically noted that the company stands “in support of our customers and the freedom of retail investors to shape their own financial future,” adding that “democratizing finance has been our guiding star since our earliest days.” But when Robinhood took steps to stem the rally, the r/WallStreetBets community felt betrayed — and began looking for alternatives.
“YO THIS IS A FUCKING CRIME WHAT @ROBINHOODAPP IS DOIN”
The list of brokerages that have stopped allowing trades and buys of the aforementioned stock fluctuated throughout the day: Robinhood and Interactive Brokers have halted trading. TD Ameritrade has placed “restrictions on some transactions in $GME and other securities,” a spokesperson told ThinkAuthority. Those restrictions “may include actions like increasing margin requirements, or limiting certain types of transactions, like short sales and those that may involve unlimited risk,” the spokesperson added.
After initial publication, Public, an app similar to Robinhood, briefly stopped its users from trading and buying certain stock. The company issued a statement on Twitter, noting, “Our clearing firm, Apex Holdings, has decided to halt the buying of $KOSS, $GME, and $AMC.”
“We disagree with this decision and are working hard for our members to resolve the issue,” the statement continues. “We’ll provide updates here as they happen.”
Around 2:45pm ET on Thursday, Public allowed its users to purchase stock again from companies like AMC and GameStop. WeBull, which temporarily restricted trades on stock from companies like GameStop and AMC, lifted those restrictions around 2:40pm ET on Thursday.
For Robinhood competitors like Public, it’s a golden opportunity. In fact, Public even doubled the free stock slice for member referrals. Popular YouTube personality Casey Neistat tweeted on Thursday morning just after the Robinhood halting began that “everyone complaining about @RobinhoodApp delisting GameStop and I’m over here on @public about to get Bill Gates rich.” He later said that no one should take investment advice from him and that he’s an investor in Public.
“Also im an investor in public and i hope this ridiculous behavior from Robinhood brings attention to superior companies (like Public),” Neistat tweeted.
Switching to a competitor will still add some friction — and might cost investors valuable time in an exceptionally volatile situation. When creating an account on Public, for instance people may have to wait a few days for their application to be approved, according to a message that appears during the signup process. If people are trying to get in on GameStop and AMC while the magic rally is still in effect, that delay might defeat the purpose — although at least one ThinkAuthority reporter had their account approved in the same day.
“YOU’D THINK WITH A BRAND NAME LIKE ROBINHOOD YOU’D BE ALL ABOUT THE WORKING CLASS OUTSMARTING THE RICH”
Most apps also allow investors to transfer their portfolios from other brokerages, including Robinhood, which could be faster. But there’s still likely to be a significant delay.
Webull is another investment app, and the FAQ states that “in most cases, account application is approved automatically.” Webull’s website also states that people can trade in the same day if “you deposit via ACH before 4:00 pm on a trading day” — basically, if funds are transferred from something like a bank to Webull. The site also states, however, that people “will get a provisional credit (up to $1000 depending on the incoming deposit) of buying power after your deposit,” which gives people “provisional buying power to trade.”
Transferring stocks from one app to another, or flocking to another app to buy stocks, seems tedious — but as long as it’s unclear when Robinhood and other brokerages will allow purchases, GameStop’s new stockholders are left with no other choice. At the time of publication, GameStop’s stock was sitting at $155 — down from yesterday’s high of $468, but still more than triple where the stock was last week.
“You’d think with a brand name like Robinhood you’d be all about the working class outsmarting the rich,” popular YouTube creator Ricky “FaZe Banks” Bengston tweeted. “You guys fkn blew it.”