Robinhood came under the spotlight this week after it halted trading in stocks such as GameStop, a US retailer at the centre of a social media investment frenzy that has caused its shares to soar. Amateur traders on social media platforms such as Reddit have been pouring money into selected stocks, partly in an attempt to cause Wall Street hedge funds to lose money.
Hedge funds often take “short” positions against a stock, betting that it will fall in value. Activists with political objections to hedge funds have been driving up the price of some heavily shorted stocks, while other online day traders have jumped on the bandwagon in an attempt to make money.
Many activist investors used retail platforms such as Robinhood to place their trades, but the firm blocked the buying of some equities on Thursday.
Amid the controversy, thousands of people flocked to the wrong Twitter profile. Bemused by the sudden interest, the World Wide Robin Hood Society tweeted: “Lovely to have all these new followers. Can we just check that you know that you’re following The World Wide Robin Hood Society in Nottingham and not the Robin Hood App. If so, a big welcome from Sherwood.“
When the society was asked if it had any stock tips, a spokesman replied: “We only know about the old-fashioned stocks, I’m afraid.”
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Lisa Douglas, who runs the society’s social media accounts, said the increase in interest had been “a complete and utter surprise”, and with Nottingham Castle due to reopen after renovations, she hopes it brings a boost to the city.
“We’ve known about Robinhood for quite a long time because we’ve been getting quite mean messages from their frustrated customers, but it just went absolutely crazy,” she said.
“What we’re going to do now is really build on the website and the Twitter side of it, because if you’ve got this many followers you’ve got a responsibility to keep them entertained and informed.“
