Judd Legum

Judd Legum @JuddLegum

Could anyone who follows me explain what this means: "As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits." It's why @RobinhoodApp says it restricted trading on GameStop and other stocks today. — PolitiTweet.org

Judd Legum @JuddLegum

RT @JuddLegum: 1. If you turn on CNBC, you'll hear a narrative that reckless retail investors from Reddit are destabilizing the stock marke… — PolitiTweet.org

Judd Legum @JuddLegum

There is a White House press briefing that starts at 2:30PM. Here is the question I would ask: Did anyone in the Biden administration contact Robinhood or other retail trading platforms about limiting trading in GameStop and other stocks? — PolitiTweet.org

Judd Legum @JuddLegum

.@RobinhoodApp blog post about why it isn't allowing retail traders to purchase GameStop and various other stocks contains NO ACTUAL INFORMATION about why it made the decision https://t.co/W6gffyttKZ — PolitiTweet.org

Judd Legum @JuddLegum

@Kantrowitz Are you sure its hated by hedge funds right now? — PolitiTweet.org

Judd Legum @JuddLegum

Surprised it took this long. — PolitiTweet.org

Judd Legum @JuddLegum

This extends far beyond GameStop and there is absolutely no transparency. How is @RobinhoodApp making these decisions and who is benefiting? — PolitiTweet.org

Judd Legum @JuddLegum

@jbarro @allahpundit @BenjySarlin @baseballcrank Who cares what normies or anyone thinks. The question is why are the rules being changed? And why are there different rules for hedge funds and retail investors? — PolitiTweet.org

Judd Legum @JuddLegum

@BenjySarlin @ericapishdadian They make all their money from hedge funds that buy their order flow. Trades are free. — PolitiTweet.org

Judd Legum @JuddLegum

@BenjySarlin I explain here: https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

Congress needs to investigate HOW the decision was made at @RobinhoodApp, @TDAmeritrade, and @CharlesSchwab to limit retail trading of GameStop and other stocks. Were there conversations with hedge funds or other large investors? WHO ORDERED THE CODE RED? — PolitiTweet.org

Judd Legum @JuddLegum

@unRonic @RobinhoodApp Thanks for flagging, I will try to get this fixed. — PolitiTweet.org

Judd Legum @JuddLegum

Everyone loves free market capitalism until the hedge funds start losing money. — PolitiTweet.org

Judd Legum @JuddLegum

4. Remember, big-time traders on Wall Street can still buy, sell, short, or buy options on GameStop or any other stock. The restrictions are only being imposed on retail traders that rely on platforms like Robinhood Two sets of rules. https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

3. So hedge funds, not small-time traders, are @RobinhoodApp's real customer It needs the small-time traders so it has something to sell. But it's the hedge funds that pay the bills Sign up for the newsletter for updates and accountability journalism https://t.co/TfpCItdVSo — PolitiTweet.org

Judd Legum @JuddLegum

@RobinhoodApp 2. Important to understand is that @RobinhoodApp does not charge retail traders to trade stock. Those small-time traders are not its customers. It uses those trades to generate trades which it then sells to hedge funds like Citadel to fulfill. https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

1. By allowing SELLING but not BUYING of GameStop, retail trading platforms like @RobinhoodApp are manipulating the stock price. The question is, who benefits? https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

@pkafka @menelmacar18 Citadel is better on Plotkin being able to print money again and the actions of Robinhood appear to make that more likely — PolitiTweet.org

Judd Legum @JuddLegum

@pkafka @menelmacar18 I don’t pretend to know exactly what’s going on but Plotkin outperformed other hedge funds by having a much bigger range of shorts. Robinhood is putting guardrails on the ability for retail investors to spoil these bets — PolitiTweet.org

Judd Legum @JuddLegum

@pkafka @menelmacar18 Impossible to know what Citadel’s short exposure is relative to marginal gains from GameStop trades, especially after investing $2 billion in Plotkin. — PolitiTweet.org

Judd Legum @JuddLegum

13. I'm just a journalist so don't take it from me. Here is a financial expert making the same point. https://t.co/26pyBtj4ec https://t.co/LQhcsM8yxS — PolitiTweet.org

Judd Legum @JuddLegum

12. Here is Robinhood acting in a way that benefits Griffin its other business partners. We need to explore why they are doing this. https://t.co/26pyBtj4ec https://t.co/ISlZfsXKQ8 — PolitiTweet.org

Judd Legum @JuddLegum

@J0Marshll yes, there is a lot of risk in stocks. I don't know what is going to happen exactly but many different people may lose money — PolitiTweet.org

Judd Legum @JuddLegum

11. It's a free market until the hedge fund moguls start losing money. Then SOMEONE NEEDS TO DO SOMETHING. For updates on this story and more accountability journalism, sign up for the newsletter. https://t.co/TfpCItdVSo — PolitiTweet.org

Judd Legum @JuddLegum

10. Griffin, who recently purchased the most expensive home in America, is only in business because of government bailouts. In 2008 he had massive exposure to AIG and relied on Morgan Stanley for lending. He survived only because they got bailouts https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

9. So Griffin is both a major business partner with these platforms AND potentially will benefit from their current actions restricting the trading of this stock. This warrants further investigation. https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

8. When retail investors want to make a trade, these platforms let Griffin fulfill it. "Citadel Securities accounts for 40 of every 100 shares traded by individual investors in the US, making it the number one retail market maker" https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

7. Restricting trading on these stocks will make it easier for Plotkin (and his new investor Griffin) and others to get out of this jam Griffin is pays these platforms tens of millions of dollars for the right to handle their "order flow" Let me explain https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

6. We now see retail trading platforms -- including TD Ameritrade, Schwab, and Robinhood -- RESTRICTING TRADES OF GAMESTOP AND OTHER STOCK. Why are they doing this? They say its to protect their customers. But is that really what's going on? https://t.co/26pyBtj4ec — PolitiTweet.org

Judd Legum @JuddLegum

5. Cohen & Griffin now own a significant piece of Plotkin's firm. So they have an interest in Plotkin navigating out of his current predicament. They also may have exposure themselves. This is where things get interesting. https://t.co/26pyBtj4ec — PolitiTweet.org