Robinhood’s plans for an initial public offering (IPO) could be on hold following the GameStop debacle that ended in a suspension of trading last week, Cryptoslate reported on Wednesday (Feb. 3), citing a tweet from Fox Business Network Senior Correspondent Charles Gasparino.
SCOOP: Ppl inside @RobinhoodApp tell @FoxBusiness plans for an IPO are on hold to focus on surviving the current drama over trading of stocks and settlement issues. Execs say they have access to even more capital than additional amounts raised today. More @TeamCavuto 1230pm
— Charles Gasparino (@CGasparino) February 1, 2021
In a survey conducted by the anonymous network Blind, 83 percent of the 8,750 professional respondents think that Robinhood “screwed its IPO,” Cryptoslate reported.
The Security & Exchange Commission (SEC) is looking into the GameStop fiasco, and Congress is reportedly introducing proposed restrictions on hedge funds trading, including short selling, the news outlet said, citing another Gasparino tweet.
BREAKING: Hedge fund execs tell @FoxBusiness theyre bracing for intense congressional scrutiny, possible restrictions on trading such as short selling amid $GME–@Reddit–@RobinhoodApp frenzy. Hedge fund trade groups gearing up and plan to lobby Congress. w More 330pm @LizClaman
— Charles Gasparino (@CGasparino) February 2, 2021
Robinhood’s GameStop fiasco has already triggered lawsuits filed by two states upset about the investing startup’s move to halt trading. The GameStop trading frenzy was propelled by the Reddit group WallStreetBets. Robinhood wasn’t alone in suspending trading. Several others also pulled trading on shares of GameStop, AMC and others, a decision that caused a digital uproar on social media and trading forums.
Robinhood said it had to stop trading after clearinghouse-mandated deposit requirements soared 10 times the normal number. The company said it had no choice but to “take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements.”