Tag: Robinhood (Page 1 of 3)

Robinhood Reports AMC at $417 Billion Market Cap

Robinhood is reporting AMC at a $417 billion market cap and more. CEO Adam Aron says they are reviewing sources to check for accuracy.
Market News Daily – Robinhood Reports AMC at $417 Billion Market Cap.

Robinhood (NASDAQ:HOOD) and other brokerages have been reporting AMC Entertainment (NYSE:AMC) at a $417 billion market cap and even $421 billion market cap.

This puts AMC Entertainment up with Facebook in terms of market cap, per the reportings.

Many shareholders have been sharing screenshots of what CEO Adam Aron believes to be discrepancies from these brokers.

The CEO said on Friday data sources are under review for accuracy after several sources, including MarketWatch, were reporting the company’s equity APE (NYSE:APE) of also having a 93.79 billion market cap.

Both AMC and APE are displaying what shareholders believe to be the true value of the securities.

Few skeptics have written off the data as simply ‘glitches’ from brokers.

AMC CEO Adam Aron has demonstrated displeasure towards these reports.

“Market Watch currently showing 93.79 billion APEs outstanding. Clearly WRONG, wildly so. We are calling them now demanding this get corrected immediately. Also reviewing many other data sources to check for accuracy. So curse-word-here irresponsible that they publish false info,” said the CEO on Twitter.

Adam Aron has previously shown a strong dislike for market manipulation talks, urging investors to focus on AMC’s fundamentals instead.

Some shareholders are rather confused by the CEOs reactions, who alleged people of possibly photoshopping their screenshots.

This has led shareholders to encourage Adam Aron to begin looking into the manipulation of AMC stock.

AMC FINRA and NYSE FTD Update

Earlier in March, Adam Aron announced that the company has contacted both FINRA and the NYSE to look closely at the trading of their stock.

“Many of you, and we, are aware that AMC Entertainment has been on ‘The Threshold List‘ for 3+ weeks, indicating a number of FTDs.

Some of you may be pleased to learn that we have contacted both FINRA and the NYSE asking that they both look closely at the trading of our stock.”

But Adam Aron nor AMC have released a formal document confirming the claims reaching out to the NYSE or FINRA.

This has led some investors to speculate the announcement was aimed at getting shareholders to vote yes for the proposals that have now been passed.

Investors have not heard back on an update from the CEO on what FINRA or the NYSE had to say about the alarming number of FTDs, which are usually a clear sign of naked shorting, per Investopedia and Business Insider.

What we know is that AMC was removed from the NYSE Threshold Securities List shortly after Adam Aron’s announcement — the stock plunged shortly after.

This is contrary to what the SEC rules say is supposed to happen once a security is listed after 13 consecutive days.

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Market News Today - Robinhood Reports AMC at $417 Billion Market Cap.
Market News Today – Robinhood Reports AMC at $417 Billion Market Cap.

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“The Game is Rigged” Says Ex-Citadel Data Scientist

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Market News Daily: Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue, an ex-Citadel Data Scientist said during the ‘meme stock’ frenzy that the stock market is rigged, claiming he helped design it.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

Not many investors know this, but Patrick actually breaks down how Citadel and other hedge funds were able to make billions back in only weeks from halts.

In this article, I’m going to share his words and knowledge in the industry directly with you.

Share this article to raise awareness of the market injustices ‘experts’ have claimed were never true.

Your voice matters.

Let’s get started.

Ex-Citadel Employee Reveals Rigged Trading Game

Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.”

Below is ex-Citadel Data Scientist Patrick McConlogue’s story.

Related: Citadel, Charles Schwab Team Up to Destroy SEC Proposals

Patrick McConlogue Says the Stock Market is Rigged

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Ex-Citadel employee Patrick McConlogue says the market is rigged.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose.

How do I know? I helped design the game.

A few years ago, I worked at the massive hedge fund Citadel. The multi-billion dollar fund was caught up in this week’s scandal for bailing out hedge fund Melvin Capital after everyday traders on Robinhood appeared close to liquidating the fund through mass buying of the GameStop stock $GME.

My role at Citadel was as an engineer in Long Term Quantitative Strategies. The entire department, filled with programmers and compliance officers, is dedicated to something called ‘alpha’ which determines the buying strategy of the fund.

I was responsible for innovative proprietary technology that capitalizes on public data faster than any other hedge fund. It’s a classic situation of machines against humans. I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.

A group of traders on the r/WallStreetBets Reddit thread, now consisting of over 8.6M members, noticed that someone had overly “shorted” the GameStop $GME stock.

They decided it was the perfect time to buy. It was only around $18 per share and easily affordable for the common investor who kept buying, driving up the price of the stock.

As the buying frenzy continued the hedge funds who had taken the opposite position started to hemorrhage money.. BIG money.

The small investors celebrated their success online as news broke that the hedge fund Melvin Capital Management had lost so much on the $GME short position that they had to be bailed out by bigger hedge funds.

While the markets were closed Melvin Capital’s sinking battleship received an emergency infusion of $2.75 billion from Citadel and Point72.”

‘Meme Stock’ Halts

Ex-Citadel employee Patrick McConlogue says the market is rigged.

“On Thursday morning, Robinhood — the commission-free stock trading app used by small investors — suddenly shut down buys on $GME and a few other stocks that were under siege.

Only sell orders went through, reversing the trend, driving the stock prices back down and shoring up the hedge funds’ sinking ships. Remember, when the stock price goes down, the people who hold the “shorts” make money.

This started a chain reaction. Other retail trading platforms like E*Trade and TD AmeriTrade began freezing the stock for individual investors. But hedge funds own supercomputers.

They have direct access to stock markets. While small investors were frozen the hedge funds traded massive positions and quickly earned back the billions in losses from the past few days.

The rules of the game had been exposed, in broad daylight no less.

Robinhood users, when signing up for the popular trading app that offered “free trading” were likely unaware of their role in the hedge funds’ ability to reap huge profits.

The system is broken.”

Patrick McConlogue left Citadel for decentralized finance and co-founded a new technology called Overline that takes the philosophy of DeFi to the extreme.

Not only is Overline unable to freeze any of your assets but it can’t even turn off the exchange; it’s not possible.

You can read Patrick’s full write-up here.

Related: Ken Griffin Thanks Redditors for ‘Meme Stocks’

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Market News Today - Ex-Citadel data scientist says the market is rigged.
Market News Today – Ex-Citadel Data Scientist says the market is rigged.

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Robinhood Lost $57 Million Shorting COSM Stock

Robinhood Lost $57 Million Shorting COSM Stock
Market News Today: Robinhood lost $57 million shorting COSM stock.

Robinhood (NASDAQ:HOOD) lost $57 million shorting Cosmos Health Inc. (NASDAQ:COSM) stock due to a ‘processing error’ that caused the company to glitch into shorting the healthcare stock.

“A processing error caused us to sell shares short into the market, and although it was detected quickly, it resulted in a loss of $57 million as we bought back these shares against a rising stock price,” CFO Jason Warnick said.

Robinhood ended up down $57 million in a single day after a glitch let its trading app customers temporarily short a meme stock, according to company executives.

Cosmos Health’s share price tripled on December 16, when a 1-to-25 reverse stock split for the healthcare company went into effect.

But the reverse stock split caused issues in Robinhood’s trading app, allowing users to briefly sell more Cosmos shares than they owned to create a temporary short position, the company said in its fourth-quarter earnings release Thursday.

Executives Forgo $500 Million

Robinhood News Today.
Robinhood News Today.

The loss suffered by Robinhood tops Cosmos’ current total market capitalization, with the healthcare stock valued at $52 million as of Friday.

Robinhood executives will forgo around $500 million in stock-based compensation to help it cut costs.

Retail investors continue to scrutinize the company after it had colluded with Citadel during the ‘meme stock’ frenzy to halt trades.

Investors speculate Cosmos Health (COSM) may have a short squeeze this year, so Robinhood’s short ‘glitch’ doesn’t look too well in retail’s eyes.

HOOD stock is currently up +23% year-to-date.

Will Robinhood ever win retail back?

Share this article and leave your thoughts below.

About the company


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Market News Today - Robinhood lost $57 Million shorting COSM stock.
Market News Today – Robinhood lost $57 Million shorting COSM stock.

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Occupy the SEC 2023 is Here: What’s Happening?

Occupy SEC 2023: Latest market news - Franknez.com.
Occupy SEC 2023: Latest market news – Franknez.com.

Retail investors are occupying the SEC headquarters in Washington D.C. on January 27th and January 28th from 10am-4pm.

The 28th marks the two-year anniversary of the ‘meme stock’ frenzy of 2021 when Robinhood and other brokerage firms prevented investors from buying more shares of GameStop, AMC, and other heavily shorted stock in order to prevent firms from collapsing.

Regulators interfered with the people’s money by suppressing shares from rising.

Majority of investors within these communities never left, but rather hoped for justice and change in the financial system.

Retail investors have raised the issues of dark pools, OTC trading, and a number of conflicts of interest that pin regular investors to the ground.

Discussions surfaced in 2022 of protesting several SEC locations in the U.S. but never came to fruition.

Some retail investors argued against these actions while many more said they are necessary to get their voices heard.

Here’s what’s happening in the retail community today.

What is Occupy SEC 2023?

protest
Market News: What is Occupy SEC 2023?

The objective of occupying the SEC is to demand changes in the financial markets and to protect retail investors and companies from naked short selling and short selling misconduct.

The nationwide protests will occur on January 27th and January 28th between 10am and 4PM at 12 SEC locations, including the SEC headquarters in Washington D.C.

Outrage filled the retail community when SEC Chairman Gary Gensler confirmed 90%-95% of retail orders are processed in off-exchange platforms where the true demand for retail orders is not being reflected on the lit New York Stock Exchange.

The Wall Street ‘watch dogs’ turned a blind eye to the Madoff events that occurred during the last decade and now they’ve turned a blind eye to naked short selling and several conflicts of interest happening today within the media, hedge funds, and even regulators.

Retail investors are saying ‘we know’ what’s happening and ‘we need you to take care of it now’.

Occupy the SEC 2023 are meant to be peaceful protests.

Communities are tired of their investments in their favorite companies plummeting all because they’ve become targets of aggressive short sellers and manipulative tactics from Wall Street.

Now they’re taking the word to the streets despite gaining much attention on social media.

The lack of market transparency since the events that occurred in January of 2021 have led to these protests.

Occupy SEC 2023 LIVE

You can watch Occupy the SEC 2023 LIVE here.

Retail investors chant “do your job” when referring to the inaction from the SEC.

What is Stopping the SEC from Taking Action?

SEC Chairman Gary Gensler told ‘We The Investors’ he understands retail’s frustrations.

But retail investors aren’t convinced.

The SEC Chairman says that short selling is a challenging area where the SEC is still working and pursuing focus on.

One of the biggest challenges according to Chairman Gensler is that Wall Street powers will send stacks of reports highlighting rebuttals on proposals aimed towards protecting retail investors.

This is primarily because certain proposals aimed to protect retail investors conflict with Wall Street money.

And because these firms are market participants, like retail investors, these documents must be legally reviewed.

The challenge only grows when Wall Street firms open lawsuits against the SEC when certain proposals become a direct hinderance to the way these companies perform.

Regulators are in a massive bind now, facing scrutiny from both Wall Street and the average investor.

FINRA, DTCC Under Retail Scrutiny

FINRA MMTLP

FINRA has received backlash after freezing the trading of MMTLP (Meta Materials) prior to its spinoff.

The self-regulated organization is also responsible for outsourcing ‘best execution’ with the best execution rule, according to SEC Chairman Gary Gensler.

This means FINRA has the power to execute orders in off-exchange and dark markets for ‘best execution’ and ‘price discovery’.

But Gary Gensler says that this rule is too important for it to not be in the SEC’s court.

The organization contains records of every trade made available intraday, including that of naked short sales.

FINRA requires firms to be able to meet their short sale requirements as well as have a process to close out fails to deliver within their required timeframes.

However, they’re the open window that allows these manipulative strategies to occur in the market.

FTDS (fails-to-deliver) are mounting up every month according to SEC data, and FINRA is unable to get firms to close out these obligations.

FINRA’s justification towards FTDs say that firms face challenges related to miscalculations.

But Chairman Gensler says this is too important for it to not be handled directly by he and his team.

DTCC Conflicts of Interest

David Inggs Citadel DTCC

David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, and has a board seat at the DTCC.

The conflict of interest has raised big concerns amongst the retail investor community online as Citadel has been a leading and one of the biggest short sellers in the stock market.

On January 28th, 2021, The DTCC waived $9.7 billion of collateral deposit, limiting institutional losses and limiting retail profits during the ‘meme stock’ frenzy.

The organization allowed several naked shares to flood the market prior to the massive jump in share prices only to help financial institutions in the end.

SEC Chairman Gary Gensler has said one proposal they’re looking at this year involves tackling conflicts of interest in the financial markets.

How can investors support the cause?

Retail investors

Retail investors have been supporting the cause for years now by distributing news and information that sheds light on real issues.

Franknez.com is a media blog that supports retail investors and protects the retail community from mainstream media propaganda.

You can raise awareness in your community by sharing this article, and others, or by using hashtag #OccupySEC2023 on social media.

Advisory: This article is intended for educational and informational purposes only. This article is not advocating violence of any kind during these peaceful rallies.

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FrankNez News Today - Market News, Business News, + more.
FrankNez News Today – Market News, Business News, + more.

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Global Head of Operations at Citadel Has a Board Seat at DTCC

Market News: Conflicts of interest arise - #CitadelScandal
Market News: Conflicts of interest arise – #CitadelScandal

David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, and has a board seat at the DTCC.

The conflict of interest has raised big concerns amongst the retail investor community online as Citadel has been a leading and one of the biggest short sellers in the stock market.

On January 28th, 2021, The DTCC waived $9.7 billion of collateral deposit, limiting institutional losses and limiting retail profits during the ‘meme stock’ frenzy.

The organization allowed several naked shares to flood the market prior to the massive jump in share prices only to help financial institutions in the end.

Citadel and Melvin Capital who shut down last year, lost billions during the event.

Melvin was crippled throughout 2022 from its severe losses in GameStop the year prior.

Had the DTCC not stepped in, the hedge fund would have closed that same year.

“Anyone shorting AMC or GameStop is out of their mind. Wallstreetbets is too powerful, and trying to bet against them right now is just giving them more ammo”, said Jim Cramer.

Since the halt of ‘meme stocks’, the retail community has been uncovering a variety of conflicts of interest too big to ignore.

Who is David Inggs?

David Inggs DTCC

David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, Collateral Management, Reconciliation & Control and Settlements and is on the Board of Directors at the DTCC.

Prior to joining Citadel, David served as Chief Operations Officer of E*TRADE where he led operations globally across Trade Execution, Global Clearing, Middle Office and Shared Services, among other functions.

David spent most of his career at Goldman Sachs, where he was a Managing Director and held numerous leadership positions over the course of a decade, including Global Head of Clearing Operations and Head of Credit Default Swaps and Equity Derivative Operations.

David also worked at Morgan Stanley, where he served as an Executive Director and Head of Global Bank Loans, in addition to work in credit derivatives and collateral management.

The Global Head of Operations at Citadel has worked for every major criminal financial institution that has been too big to face serious consequences from fraud or market manipulation in the past.

Retail investors say this is market injustice and regulators are part of the problem.

Who is the DTCC?

The DTCC (Depositary Trust and Clearing Corporation) is an American post-trade financial services company providing clearing and settlement services to the financial markets.

The DTCC processes trillions of dollars of securities on a daily basis.

As the centralized clearinghouse for various exchanges and equity platforms, the DTCC settles transactions between buyers and sellers of securities.

The information is recorded by its subsidiary, the NSCC.

After the NSCC has processed and recorded a trade, they provide a report to the brokers and financial professionals involved.

This report includes their net securities positions after the trade and the money that is due to be settled between the two parties.

Clearing corporations such as the DTCC may receive cash from a buyer and securities or futures contracts from a seller.

The clearing corporation then manages the exchange and collects a fee for this service.

The size of the fee is dependent on the size of the transaction, the level of service required, and the type of security being traded. 

Investors who make several transactions in a day can generate significant fees.

This means every naked share that has been created on the ‘short side’ has been recorded and bypassed by the DTCC/NSCC, all for a fee.

Related: Robinhood and Citadel Colluded Night Prior to Trading Restrictions

GameStopped

DTCC GME
DTCC GME Halt – GameStopped.

A press released was published advising of the circumstances that occurred during the time ‘meme stocks’ were halted.

The DTCC waived $9.7 billion of collateral deposit requirement on January 28th, 2021, limiting institutional losses and limiting retail profits.

While AMC Entertainment stock was able to surge months after the January event, GameStop shareholders were strongly affected by the halts.

Retail investors say they feel cheated from regulators who failed to let the short squeeze play out in their favor.

Conflicts of interest such as David Inggs’ involvement with Citadel and the DTCC could be seen as a detriment to market integrity.

In an interview with ‘We The Investors’, SEC Chairman Gary Gensler said one proposal they’re looking at this year involves tackling conflicts of interest in the financial markets.

Citadel processes more than 40% of retail’s orders through PFOF (payment for order flow), and with a bias towards short selling, gives the hedge fund an incredible advantage over the common investor.

Should the involvement between both Citadel and the DTCC be considered a crime?

Or is this just a coincidence?

Leave your thoughts below.

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Franknez.com is the media blog that keeps retail investors informed.

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Robinhood and Citadel Colluded Night Before Trading Restrictions

Robinhood and Citadel Colluded
Market News: Robinhood and Citadel colluded before ‘meme stock’ restrictions

The U.S. House Committee on Financial Services just published a press release stating Robinhood and Citadel Securities engaged in ‘blunt’ negotiations before the trading of ‘meme stocks’ occurred.

The press release states that talks regarding lowering PFOF (payment for order flow) rates happened just a night before trading restrictions.

Robinhood and Citadel GameStopped Report
GameStopped Report Notes

The “GameStopped” report issued by the U.S. House Committee on Financial Services greatly details how the NSCC saved Robinhood from defaulting due to failing to meet collateral obligations.

This article is going to highlight key points relating to the ‘meme stock’ halts that occurred in late January of 2021.

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GameStopped Report – U.S. House Committee on Financial Services

Robinhood and Citadel GameStopped

The GameStopped report highlights Robinhood’s lack of liquidity, conversations between Citadel and Robinhood, and the process leading to the halting of ‘meme stocks’ such as AMC and GameStop.

On January 28th, 2021, Robinhood routed orders to six market makers for equities: Citadel Securities, G1 Execution Services, Morgan Stanley, Two Sigma Securities, Virtu, and Wolverine.

Citadel, Morgan Stanley, and Wolverine are short on AMC to this day.

The conversations between Robinhood and Citadel were tense as the two negotiated the price of PFOF rebate rates and price caps for AMC and GameStop.

Furthermore, Robinhood received a massive waiver of its deposit requirement from the DTCC.

And according to the report, without this waiver, Robinhood would have defaulted on its regulatory collateral obligations.

NSCC officials say the waiver was necessary to avoid systemic risk to the market.

They explained that the extraordinary spike in ‘meme stocks’ contributed to increased clearing fund requirements for several firms.

Trading Restrictions Chart - GameStopped
Trading Restrictions Chart – GameStopped

Brokers halted the buying of AMC, GameStop, and other tickers when short sellers began to close their short positions, causing share prices to skyrocket.

The halting occurred due to a lack of liquidity where certain brokers were unable to cover the minimum collateral requirements.

The DTCC waived a total of $9.7 billion of collateral deposit requirements on January 28, 2021.

Global Head of Operations at Citadel Has a Board Seat at DTCC

David Inggs Citadel DTCC

David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, and has a board seat at the DTCC.

The conflict of interest has raised big concerns amongst the retail investor community online as Citadel has been a leading and one of the biggest short sellers in the stock market.

On January 28th, 2021, The DTCC waived $9.7 billion of collateral deposit, limiting institutional losses and limiting retail profits during the ‘meme stock’ frenzy.

The organization allowed several naked shares to flood the market prior to the massive jump in share prices only to help financial institutions in the end.

Citadel and Melvin Capital who shut down last year, lost billions during the event.

Melvin was crippled throughout 2022 from its severe losses in GameStop the year prior.

Had the DTCC not stepped in, the hedge fund would have closed that same year.

Retail Feels Cheated

GameStop - GameStopped
Robinhood and Citadel colluded prior to restrictions

Retail investors feel they were robbed when brokers took away the ‘buy’ button by restricting trading in AMC, GameStop, and other ‘meme stocks’.

The DTCC jumped in and saved Robinhood from defaulting, cut Citadel’s losses short, and prevented retail investors bets from reaching maximum potential.

No one has been held accountable for these actions primarily because the system is justifying the actions as saving the market from total collapse.

But the system stole from retail investors to save institutional investors.

Regulators intervened to save institutions while they capped retail investor gains.

Still, hedge funds lost billions of dollars during the process.

GameStop broke Melvin Capital.

The hedge fund was not able to recover from its massive losses and has now shut down.

But Citadel nor Robinhood have faced any severe consequences that money can’t buy them out from.

Retail investors are now looking at our government and regulators as complicit to fraud and market manipulation.

You can view the full detailed report here.

What are your thoughts on the incidents that occurred during this time?

Leave a comment down below.

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Why New Retail Investors Should Avoid Investing With Robinhood

why new retail investor investing in AMC should avoid robinhood
Investing with Robinhood?

There’s been a surge of new retail investors questioning why they should ditch Robinhood or avoid it.

Seasoned retail investors holding AMC stock have been guiding newcomers in order to help them prepare and maximize their profits for when AMC squeezes.

I’m going to go through a number of reasons why new retail investors investing in AMC should avoid Robinhood.

If you hold AMC stock (or even GME stock) in Robinhood or are thinking of investing in AMC, then this article is perfect for you.

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Welcome to Franknez.com – the blog where you can digest content on personal finance, stock, crypto, and trending investing news.

Lets get started!

If you’re new to the AMC community be sure to read the articles on the stock & crypto news as well as on the momentum stocks tab to catch up on everything there is to know about AMC’s short squeeze, market manipulation, and the stock’s data.

Robinhood App Origin

Vlad Tenev Robinhood
Vlad Tenev, Robinhood

Robinhood is an American financial services company that was founded in April 2013 by Vladimir Tenev and Baiju Bhatt.

Robinhood is headquartered in Menlo Park, California.

The app was introduced in March of 2015 and offered commission-free trades of stock and other funds to its users making it an extremely attractive choice for new retail investors.

Robinhood for the most part had a very positive and outlook and following since its inception.

So, what happened to this beloved company and why are retail investors investing in AMC Entertainment staying clear from this trading application?

Robinhood halts GameStop
Robinhood halts trading

Lets get you caught up.

Robinhood Restricts Purchasing of GameStop and AMC Stock

Thursday, January 28th, 2021 – Robinhood halts purchasing of GameStop, AMC, and BlackBerry stock.

On Thursday, January 28th Robinhood announced it would restrict retail investors from trading in GameStop, AMC, and even BlackBerry stock.

This single handedly move would leave new retail investors baffled with their beloved trading application.

The catch with Robinhood trading halt

Robinhood AMC GameStop

What left retail investors more puzzled was the fact that Robinhood halted the purchasing of ‘meme’ stocks but not the selling of them.

This halt affected GameStop’s momentum.

The act of selling would play in hedge funds’ favor.

Retail investors were quick to make their concerns public and went as far as to connecting the dots on their own.

The Reddit community suspected foul play and the information that was discovered only confirmed more market manipulation.

The Connection between Robinhood, Citadel, and Melvin Capital

Connection between Robinhood, Citadel, and Robinhood

The Reddit community discovered that Citadel is Robinhood’s clearing house.

This means that this hedge fund shorting AMC and GameStop stock has direct access to processing retail investors transactions.

Citadel lends money to Melvin Capital who shorts these stocks.

Both Citadel and Melvin Capital have denied having anything to do with Robinhood’s decision to halt trading but this connection has severed the bond between Robinhood and it’s users investing in AMC and GameStop stock.

Hedge funds lost billions of dollars when GameStop squeezed and are currently losing millions of dollars every day from holding AMC.

Read: When do shorts have to cover their positions? (AMC)

Robinhood Protects Hedge Funds

Vlad Tenev has denied the idea that halting trading was done in order to protect its hedge fund affiliates.

It’s from this simple statement that retail investors lost all respect for the Robinhood CEO.

Robinhood stands for taking from the rich and distributing the wealth amongst the poor.

Robinhood’s ethics shattered its trust with the Reddit community by proving otherwise.

Read: How do hedge funds manipulate the stock market?

When a public figure messes up big time, the first step towards correcting your mistake is to be honest about it.

Frank Nez

Has the SEC done anything to regulate the manipulation?

SEC

In short, no. Members of the SEC have more than likely been lobbied to ease regulations.

The AMC community has recently gotten together and shared their concerns via Twitter generating the hashtag, #SECdoyourjob.

I wrote an in-depth article on the SEC which many in the community have shared and tagged them directly.

You can check it out here.

Since the publish of this article, we’ve actually seen the SEC raise some concern regarding the excessive shorting hedge funds continue to practice on both AMC and GameStop stock.

We’ve made some progress apes.

But we must not let off the gas pedal.

Warren Buffett expresses his concerns about Robinhood

Warren Buffett warns new retail investors the potential of losing a lot of money through Robinhood calling it a gambling app.

Graham Stephen goes more into detail about what Warren had to say during his annual conference and also provides insight on Robinhood’s cancellation.

Robinhood just got cancelled

Robinhood just got cancelled – Graham Stephen

This video goes into other details as to why Robinhood is losing its reputation other than the reasons mentioned on this article.

Why should retail investors investing in AMC ditch Robinhood?

AMC Entertainment stock has the perfect setup for a short squeeze. The biggest concern the AMC community has is that Robinhood is going to halt trading AMC stock once it moons.

If this happens, say goodbye to the opportunity of a lifetime.

What broker should I invest with instead?

There a numerous broker accounts you can use. I personally use Vanguard.

Some of you may know Vanguard from being one of the biggest AMC shareholders in the market.

They’ve been adding to their position all year and have proven to be an outstanding broker.

Here’s a list of other brokers you can use to invest in AMC:

  • Fidelity
  • Charles Schwab
  • ETrade
  • TD Ameritrade
Robinhood Vanguard

I published an article on how to invest in stock market step by step using Vanguard.

If you know friends or family who are curious about investing but haven’t pulled the trigger, link them to save you the time teaching them.

How to transfer stocks out of your Robinhood Account

If you hold AMC stock in a Robinhood account and are afraid they might restrict you when AMC squeezes, you can transfer your stocks out of Robinhood using their Automated Customer Account Transfers Service (ACATS) to other brokerages.

Note: If you transfer all of your assets over to another brokerage, Robinhood will close your account.

Is there a fee to transfer stocks out of Robinhood?

Yes. Robinhood charges its users a $75 fee to transfer your assets out of Robinhood.

How long does it take for my assets to transfer out of Robinhood?

Robinhood users are experiencing up to 4 days for their assets to transfer out of their broker account.

The time it takes for your assets to show up on your new brokerage account may vary.

What you can do to speed up the process is setup you new brokerage account ahead of time in order to avoid delays.

What if I miss AMC’s short squeeze?

Analysts such as Trey’s Trades are anticipating AMC’s short squeeze can last several days to even several weeks.

If you’re nervous about transferring your assets here are other solutions:

  1. Open an additional position with a different brokerage.
  2. Transfer some assets into a new brokerage.

AMC’s short squeeze is still unfolding.

The stock has the perfect setup and we’re finally beginning to see things play out in the retail investors favor.

Although we can’t calculate for certain the date the squeeze will occur, the data does seem to advise it’s close.

AMC short squeeze prediction

AMC short squeeze prediction

Although a short squeeze can happen at any moment, my instincts are telling me we could see this happen early 2022.

Will hedge funds move into 2022 facing losses again?

I think they’ll close leading into the new year.

Read: How soon will we see an AMC short squeeze?

Join the Discord community

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If you found this article to be helpful, then be sure to join the Discord community.

This safe community is where new retail investors can get help from seasoned retail investors as well as communicate with me one on one.

Leave the community a comment below and share your story.

Are you having issues switching out of Robinhood?

How long did the process personally take you?

Let the community know bellow.

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Robinhood Continues to Face Market Manipulation Claims

Robinhood continues to face market manipulation claims
Market News: Robinhood faces scrutiny today for last year’s trading restrictions

U.S. District Court Judge Cecilia Altonaga in Miami dismissed some allegations against the Robinhood last year but is allowing others in a proposed investor class-action lawsuit to move forward. 

Robinhood must face market manipulation claims this year that arose from the ‘meme stock’ frenzy in early 2021.

The broker had allegedly colluded with market maker Citadel and removed the buy button, preventing retail investors from buying stocks such as AMC and GameStop.

US District Judge Cecilia Altonaga said in her ruling Thursday that the case raises “interesting legal questions”.

Here’s the latest market news.

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Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

Let’s dive right into it!

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Robinhood faces scrutiny more than a year later

U.S. District Court Judge Cecilia Altonaga in Miami said in the ruling that investors in GameStop Corp, AMC Entertainment Holdings Inc and seven other stocks can proceed with a proposed class action lawsuit alleging the restrictions artificially increased the stocks’ supply.

The lawsuit was one of several cases brought against Robinhood after it temporarily restricted its customers from buying AMC and GameStop as they began to surge in share price.

Citadel, who to this date is short on the ‘meme stocks’, allegedly colluded with Robinhood the night prior to the trading restrictions.

The U.S. House Committee on Financial Services published a press release in July stating Robinhood and Citadel Securities engaged in ‘blunt’ negotiations before the trading of ‘meme stocks’ occurred.

On January 28th, 2021, Robinhood routed orders to six market makers for equities: Citadel Securities, G1 Execution Services, Morgan Stanley, Two Sigma Securities, Virtu, and Wolverine.

All of which are short on AMC and GameStop.

But despite the continued claims to this date, it leaves you wondering.

Is Robinhood a scapegoat?

Could Robinhood simply be taking the blame for everything that occurred last year, allowing market makers to get away with market manipulation?

See, there’s a connection between Judge Cecilia Altonaga and a defendant’s law firm.

Altonaga’s husband George Mencio, is a partner to Holland and Knight, the defendant of Two Sigma Securities in this case.

This creates a major conflict of interest.

Source

I’d love to learn what you think, leave a comment below.

You can learn more about the conflicts of interest surrounding judge Altonaga here.

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Citadel Paid SEC $22.6 Million to Settle Charges of Misleading Conduct

Citadel Paid SEC $22.6 million
Market News: SEC and IEX go after Citadel years after charges of misleading conduct.

In 2017, Citadel paid the SEC $22.6 million to settle charges that it misled customers about the way it priced trades.

The SEC found that between 2007 and 2010, Citadel used two algorithms to execute stock trades on customers’ behalf that gave investors a worse price for their trades, even when Citadel knew better prices existed elsewhere.

The SEC penalized Citadel for failing to disclose the use of those algorithms to clients.

“This affected millions of retail orders,” said Stephanie Avakian, the acting director of enforcement at the SEC at the time.

Citadel neither admitted nor denied the findings.

Today, Citadel has lost the court case against the IEX order type crippling its trading strategy, more on that down below.

franknez.com

Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

Let’s dive right into it!

Join the newsletter to become part of an activist group fighting for market transparency!

Receive weekly market news and articles like this to stay up to date.

Citadel cheats retail investors

Citadel has been cheating retail investors for years now through a variety of loopholes the SEC has failed to stop.

The market maker is responsible for processing almost 50% of retail orders.

Citadel receives these orders by paying brokers such as Robinhood in what’s known as PFOF, or payment for order flow.

The problem arises when these orders are then traded through foreign exchanges allowing Citadel to pocket the best trading bid, essentially stealing from retail.

They accomplish this through HFT, or high frequency trading.

And because 90%-95% of retail orders are not executed through the lit exchange (NYSE), it gives Citadel’s short positions a massive advantage against retail investors going long.

This means only a small fraction of the demand is truly reflected in a company’s share price.

What is currently being done about the market manipulation?

SEC Citadel

The SEC has publicly discussed the possibility of banning PFOF for good, but the industry has lashed out.

In October of last year Citadel sued the SEC over the new D-Limit order that would protect displayed lit orders from being picked off by latency arbitrage players.

IEX is an exchange that relies heavily on the D-Limit order to outperform displayed order prices on other exchanges.

This means that predatory strategies such as market arbitrage, where high frequency firms profit from lower prices in foreign exchanges, will no longer be able to do so.

High frequency trading has been used against retail investors to not only gain better prices on stock from other ‘slow loading’ exchanges, but by also using this advantage to sell stock significantly cheaper.

So when you find an exchange that is showing lower prices, hedge funds betting against certain tickers may borrow high in another exchanges while benefiting the difference from selling the stock in those displaying lower prices.

The D-Limit order uses AI technology that provides more consistent and accurate data across all exchanges.

How will IEX affect Citadel?

how will IEX affect Citadel

In short, Citadel Securities and other high frequency trading firms will lose a lot of money.

The reason being is they are making money every second from using this high frequency trading technology to their benefit by getting better prices than anyone else in the market.

The IEX Exchange would put Citadel Securities in the same courtyard as retail investors, leveling the playfield.

IEX would create a foundation for a fairer market.

Citadel paid the SEC $22.6 million to settle charges on misleading conduct in 2017, but karma seems to be catching up for the hedge fund and market maker.

On July 29th, 2022, it was announced that Citadel has lost the court case against the IEX order type.

This is massive win for retail investors and a huge blow to the market maker and hedge fund.

But the SEC still has a lot of work ahead, especially if they’re looking to earn the trust of retail investors.

Only time will tell how significant this battle truly is.

For more market news and updates, join the newsletter today.

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Sources: Reuters.

Related: Citadel Loses Court Case to IEX Order Type

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