By: Sean Rhomberg
FAYETTEVILLE, Ark. – The number one app on the Apple finance charts finds itself in hot water following a monumental week on Wall Street.
Rob Wells, a University of Arkansas journalism professor and former Wall Street reporter, said the situation is one of the most unique he has ever experienced.
“[It’s crazy to see] a bunch of folks on a reddit forum using a weird trading app called Robinhood to bring down these hedge funds,” Wells said. “This is just extraordinary.”
Robinhood is a free trading app designed to encourage simple trading for anyone.
After reddit users on the page wallstreetbets managed to make thousands on stocks like Gamestop (GME) and AMC (AMC), Robinhood momentarily paused trading, issuing the following statement:
“Amid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities.”
The decision to block trading of certain stocks left many unhappy about the decision.
Zack Perko bought into Gamestop early on in the surmounting excitement but sold quickly. He said the next time he went to buy, Robinhood had blocked transactions leaving him frustrated.
“Im never using Robinhood again for sure,” Perko said. “Their slogan is democratize trading for all and then they do that?”
Now as Robinhood gradually lifts restrictions on Gamestop, they face questions from users and critics alike regarding the ethics of their actions.
Wells said that the move made late last week was not in the best interest of the company going forward.
“I just found ya know the idea of a trading app restricting people from trading in stocks to be personally a really bad idea,” Wells said.
Now, as many users look to take their business off of Robinhood, other free trading apps like Webull have seen a rise in popularity. Webull now sits at number four on the finance charts in the Apple app store.
The app announced early this week it would secure $3 billion in order to keep up with the high trading and download demands. Robinhood is averaging around 1 million downloads per day after the events of last week.
While Gamestop most likely wont be able to support the price surge for long, instant trading apps are most likely here to stay thanks to their easy-to-use interface.