GameStop shares soar AGAIN in pre-market trading as Robinhood lifts restrictions but CEO DEFENDS selling users' GameStop shares without permission as 'Wolves of Reddit' amateur traders are compared to 'disruptor' Trump
GameStop shares soared again this morning in pre-market trading as Robinhood lifted its restrictions on the unlikely stock which has surged by 1,700 per cent this month because of the 'Wolves of Reddit.'
Robinhood, a cheap trading platform favored by the WallSreetBets Reddit group, even started selling its users' stock without their permission on Thursday after market volatility put the White House on alert.
GameStop soared by 103 per cent to $393.01 at 4.05am in New York, while other meme-driven surges were seen in AMC - up by 62 per cent - and in clothes firm Express Inc. which rose by 43 per cent.
Robinhood CEO Vlad Tenev, 33, last night defended his firm's decision to sell users' shares without permission as protesters gathered on Wall Street to vent their fury at the hedge fund establishment.
'We had to make a very difficult decision. It's been a challenging day,' Tenev told MSNBC.
Robinhood cited 'recent volatility' for the decision to block users from buying stock in GameStop and 12 other companies which the Reddit users had selected for 'short squeezes.'
They've been hit with a class-action lawsuit accusing them of siding with Wall Street by blocking investors' ability to buy shares.
The firm borrowed $1 billion from its investors Thursday as their existing infrastructure struggled to meet the demands of millions of new users who have downloaded their app in recent days.
Radio host and Trump loyalist Rush Limbaugh compared the hoopla surrounding Reddit group WallStreetBets to the backlash against Donald Trump, asserting that the elites in the 'Deep State' would 'destroy' anyone who managed to beat them.
Vlad Tenev, the CEO and co-founder of Robinhood, on Thursday night defended his company's actions
Tenev appeared on CNBC after a wild day for his firm which saw the company stop the sales of certain stocks
Shares in GameStop soared by 103 per cent to $393.01 at 4:05am in New York
Robinhood began forcibly close certain stock positions if they were deemed 'too risky' and involved large amounts of borrowed funds
Tenev defended his position on CNBC, saying: 'We made the decision in the morning to limit the buying of about 13 securities on our platform. So to be clear customers could still sell those securities, if they had positions in them, and they could also trade in the thousands of other securities on our platforms.
'That's what we had to do as part of normal operations.'
But Robinhood's buying halts drew fierce backlash from members of the Reddit forum WallStreetBets, which had promoted the stock, and the Senate Banking Committee announced it would hold a hearing on the matter.
On Thursday, a federal class action lawsuit was filed against Robinhood in the Southern District of New York over the move to halt certain trades.
The suit accused Robinhood of 'pulling securities like [GameStop] from its platform in order to slow growth and help benefit individuals and institutions who are not Robinhood customers but are Robinhood large institutional investors or potential investors.'
Some critics have accused Robinhood of catering to Citadel Securities, a hedge fund that is a major investor in the company, and also pays for order flow in an arrangement that subsidizes the app's free trading.
Citadel this week participated in an nearly $3 billion bailout of Melvin Capital, one of the hedge funds that faced crushing losses as GameStop shares rallied this month - but Citadel claimed in a statement that it had not ordered the trading halt.
'Citadel Securities has not instructed or otherwise caused any brokerage firm to stop, suspend, or limit trading, or otherwise refuse to do business,' the fund said.
Robinhood co-founders Vlad Tenev, left, and Baiju Bhatt pose at company headquarters in Palo Alto
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