Facebook has reportedly shut down a popular stock trading group due to alleged policy violations, the page’s founder claims, who argues the real reason behind the sudden ouster is the windfall its members made off all the GameStonks drama this week.
Robinhood Stock Traders boasted over 157,000 members before Facebook took it offline on Wednesday, its founder, Allen Tran, told Reuters (Note: The group is not affiliated with the popular stock trading app Robinhood that’s currently facing a class-action lawsuit from pissed off stockholders). In a notification about the ban reviewed by Reuters, Facebook said the group violated its policies against “adult sexual exploitation” without going into further detail.
Tran claims he never saw anyone posting adult content in the group, and argued that it’s just a trumped-up charge Facebook came up with to break up retail traders who are making bank off the recent Reddit-fuelled trading frenzy, per the outlet. In a Facebook post about the suspension, he said “the major institutions are attempting to silence our community” and Robinhood Stock Traders was targeted “because we are more powerful than them.”
In case you missed it, Reddit’s popular stock-trading community, WallStreetBets, launched a coordinated effort this week to drive up the value of GameStop stock and screw over hedge funders who bet against the (admittedly floundering) game retailer. Gamestop stock prices shot up from less than $US20 ($26) per share at the beginning of the month to an all-time high of $US492 ($642) per share on Thursday. The price fluctuated wildly as retail investors came out in droves, eventually turning their sights onto other companies with highly shorted stocks such as AMC and BlackBerry, and panicked investment apps subsequently cracked down on their efforts. The whole ordeal has resulted in tons of memes and massive losses for hedge funds like Melvin Capital Management that bet on those struggling companies to tank.
Some of the members of Tran’s group made tens of thousands of dollars in these trades, he said, claiming that their recent success is likely why institutional investors moved to break them up.
“We were first on the picking tree to be cut off because we are on Facebook, not a free platform like Reddit,” he told Reuters. “With all these major institutions being frustrated with the success of retail, they are trying to target any groups they can.”
Tran has since created a new page to replace the original that’s racked up nearly 10,000 members as of Thursday evening. But he’s worried Facebook may shut down that group too. The old group was suspended once before on Jan. 7 after being labelled as a “dangerous organisation,” according to correspondence reviewed by Reuters. Facebook later reinstated its privileges after Tran appealed the decision.
Facebook did not immediately respond to Gizmodo’s request for comment on the matter. The company confirmed the ban to Reuters but declined to provide additional details regarding the suspension.