Robinhood : empowering or controlling retail investor behavior / Arpita Agnihotri, Saurabh Bhattacharya.

Format:

Book

Author/Creator:

Agnihotri, Arpita, author.

Bhattacharya, Saurabh, author.

Series:

SAGE business cases.

SAGE business cases

Language:

English

Subjects (All):

GameStop (Firm).

Short selling (Securities).

Stocks.

Investment analysis.

Physical Description:

1 online resource : illustrations.

Place of Publication:

London : SAGE Publications: SAGE Business Cases Originals, 2023.

Language Note:

English.

Summary:

Robinhood Financial LLC (Robinhood), an app-based financial service company based in California, offers commission-free stock trading to inexperienced retail investors. On January 28, 2021, Robinhood halted the trading of GameStop Corp (GameStop) stocks and a few other companies' stocks, as retail investors won against short sellers by driving stock prices high. Promotion and discussion on GameStop's and other companies' stocks by community members of WallStreetBets, a channel of Reddit, and others on social media, including tweets from Elon R. Musk (CEO of Tesla), led to a rapid increase in the price of stocks of the companies. In February 2021, Robinhood received criticism from investors and lawmakers accusing the company of market manipulation by halting the trading of stocks of companies like GameStop and favoring hedge fund managers who shorted those stocks. Robinhood mentioned that The Depository Trust & Clearing Corporation (DTCC) increased collateral limit for these volatile stocks, and Robinhood's inability to match that collateral resulted in the halting of trading of volatile stocks. Members of the DTCC included short sellers and market makers like Citadel Securities, from whom Robinhood earned their revenue through payment of flow order process. The power of naive retail investors over experienced short sellers resulted in losses of billions of dollars. Vladimir Tenev, the CEO of Robinhood, needed to decide how to handle a similar mass retail event in the future. Should he ensure never to let a mass retail event like the GameStop situation happen again? Or should Tenev instead focus on ways to let mass retail events occur without its internal system interfering in stock trading?

Notes:

Description based on publisher supplied metadata and other sources.

ISBN:

1-5296-1169-5

9781529611694

OCLC:

1362531398