Google has removed more than 100,000 negative reviews of Robinhood trading app from its Play Store. Users were upset that they could no longer buy GameStop shares. That trade got a boost thanks to the r/WallStreetBets subreddit.
Google took action against review bombing of the Robinhood app for Android with the removal. Users massively rated the app with a single star, where the app previously received an average of four stars, 9to5Google found. The app for iOS does not seem to be affected by any review bombing yet.
This is another step in a series of events that started with the r/WallStreetBets subreddit. Members of that community decided to take action against short selling of GameStop stock by hedge funds. Those hedge funds were anticipating a fall in the price of GameStop shares due to the alleged dire situation of that company. By selling borrowed shares at a still relatively high price, they initiate a cycle of depreciation and by buying back at a later lower price, these funds make a profit at the expense of GameStop in this case.
Members of WallStreetBets then decided to reverse the cycle by buying GameStop shares. According to them, the prospects were not bad at all due to good game sales. As a result, the value of a GameStop share increased by 1000 percent in the past week. Hedge funds such as Melvin Capital Management and Citron Research ran into problems because of this: they had to buy back the borrowed shares for a much higher price instead of a lower price. Another factor is that by borrowing from each other they try to short on many more shares than there are actually. Reuters writes that the loss of all affected hedge funds could now exceed $70 billion.
Robinhood then decided that its users could no longer purchase GameStop shares, citing “market volatility.” The measure is said to be intended to protect users, but also appeared to cause a fall in prices, benefiting hedge funds while penalizing individual shareholders. Users reacted furiously to this decision and decided to review bombing. A class-action case against Robinhood is also pending, Vice writes. That app will now allow ‘limited purchases’ of the shares again.
GameStop price from last week