Robinhood on Thursday restricted trading in thirteen equities, including GameStop and AMC Entertainment.
Robinhood CEO Vlad Tenev said Robinhood’s move to stop trading in certain speculative names was in the best interest of the company and its millions of users. “In order to protect the firm and protect our customers we had to limit buying in these stocks,” Tenev told CNBC’s Andrew Ross Sorkin Thursday evening. “Robinhood is a brokerage firm, we have lots of financial requirements. We have SEC net capital requirements and clearing house deposits. So that’s money that we have to deposit at various clearing houses. Some of these requirements fluctuate quite a bit based on volatility in the market and they can be substantial in the current environment where there’s a lot of volatility and a lot of concentrated activity in these names that have been going viral on social media,” said Tenev. Tenev denied there was any existing liquidity issue at the firm and said Robinhood had tapped credit lines as a proactive measure.
