GameStop’s ride of a lifetime hit a major roadblock yesterday.
The video game retailer’s stock fell as low as $222.06 per share — far above its $17.75 price to start the year, but an indication the stock’s incredible rally is not invincible.
On Thursday morning, brokers like Robinhood, TDAmeritrade and Charles Schwab restricted “Buy” transactions on GameStop and other “meme” stocks like BlackBerry and AMC Entertainment.
More than 50% of Robinhood investors reportedly held GME in their portfolios.
As Robinhood put its clamps down on the retail investors’ aggressive play against financial institutions, backlash has now turned on the app.
Users tanked the app’s rating and a class-action lawsuit was filed against Robinhood.
Robinhood’s move also sparked rare bipartisan agreement from political polar opposites, including Rep. Alexandria Ocasio-Cortez and Sen. Ted Cruz.
Cruz tweeted “fully agree” to a tweet from AOC suggesting Robinhood’s move was “unacceptable.”
“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,” she wrote.
Robinhood CEO Vlad Tenev told CNBC that the company limited the purchase of certain stocks to protect customers in a volatile market.
“We absolutely did not do this at the direction of any market maker or hedge fund or anyone,” he added.