If you’ve spent the last day or two trying to suss out if money is real while watching a green line go up, you’re not alone. The GameStop spectacle pitting Reddit against hedge fund giants has everyone talking, even if it’s just to try and figure out what the hell is going on. But the increased visibility around the hijinks has had some major repercussions for people trying to game the system, and the services people were using to do it are now closing ranks.
First, late on Wednesday night, news broke that chat app Discord banned the WallStreetBets server, where users gathered to shoot the shit and discuss their stock strategies. In a statement to The Verge, Discord said that the ban had nothing to do with potential stock market manipulation, noting that the server was full of “hate speech, glorifying violence, and spreading misinformation.”
“We decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after repeated warnings,” a Discord rep said.
While users admit that hate speech appeared on the massive community, they also allege that the chat had measures in place to try and stop it. But since the community was so massive, that was a futile task. As one moderator wrote on Reddit, “We blocked all bad words with a bot, which should be enough, but apparently if someone can say a bad word with weird unicode icelandic characters and someone can screenshot it you don’t get to hang out with your friends anymore.”
For a brief while, the subreddit dedicated to the scheme went private on Wednesday, but as of Thursday morning, it’s back up. The posts at the moment are largely angry, thanks to a new and surprising development: Services like Robinhood and TD Ameritrade have restricted trades for GameStop and other meme stocks, such as AMC Theatres. At the moment, you cannot search for GameStop on Robinhood, nor can you buy shares. You can only close out and sell your shares. The stock prices have remained high compared to what they were a few weeks ago, but they are lower than they have been earlier in the week. As of this writing, while prices continue to fluctuate, the GameStop stock appears to be tanking.
Robinhood says it did this to tackle “market volatility,” but users are outraged. Many are pledging to delete the app outright, if not starting to think about a potential class-action lawsuit. After all, a stockbroker like Robinhood shouldn’t be able to determine what people can or cannot buy. There’s the sense that services like Robinhood are trying to protect large financial institutions, which is counter not only to its name, but also its previously stated mission of allowing everyday people to invest in the stock market. Users are now looking into other options, and urging each other to continue to hold firm despite these setbacks: Phrases like “do not sell” and “hold the line” are currently trending on social media.
after delisting GameStop and AMC, Robinhood has gotten over 100,000 1 star reviews in one hour on the app store, now set with a 1 rating. they deserve it pic.twitter.com/eDNDuPrj8r— Rod Breslau (@Slasher) January 28, 2021
Most of these moves have rested on the shoulders of big tech. But the U.S. government, including President Biden’s administration and Senator Elizabeth Warren (D-MA), is also keeping an eye on the situation, so it’s possible we haven’t seen the full extent of the fallout just yet. For now, though, it seems that the hijinks around the GameStop stock may be contained compared to the frenzy that unfolded earlier this week.
Update (12:07 p.m. EST): Politicians are starting to call for government intervention, with progressive congresswomen such as Alexandria Ocasio-Cortez (D-New York City) and Rashida Tlaib (D-Detroit) saying they would support a hearing in the House of Representatives on Robinhood’s decision to restrict GameStop trades.
“They’re blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who’ve used the stock market as a casino for decades,” Tlaib wrote on Twitter, commenting on an article estimating that half of all Robinhood users currently own GameStop stock.
This is unacceptable.— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
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. https://t.co/4Qyrolgzyt
Update (3:44 p.m. EST): Senator Sherrod Brown (D-OH), future chairman of the government committee that oversees banking, says he intends to hold a hearing on the state of the stock market. The senator is pledging to “make the economy work for everyone not just Wall Street.”