Trading212: The App That Betrayed Its Users and Sided with Wall Street
Examining the Controversial Actions of Trading212 during the AMC and GME Squeeze of 2021
Ah, January 2021. A time when retail traders banded together to take on the big dogs of Wall Street and almost succeeded. It was a time when the meme stock craze was at its peak, with stocks like AMC and GME soaring to unprecedented heights. And it was a time when Trading212, the popular trading app, revealed its true colors as a predator of its own customers.
What Was Happening at That Time?
For those who were living under a rock (or, you know, not obsessively checking stock market news), let me give you a quick recap. Retail traders, organized primarily on Reddit's WallStreetBets forum, banded together to buy up stocks that were heavily shorted by big hedge funds. The idea was that by driving up the price of these stocks, the hedge funds would be forced to buy back their short positions at a loss, leading to massive profits for the retail traders.
And it worked, for a while. Stocks like AMC and GME skyrocketed, with some investors making life-changing gains. But then, the trading apps that these retail traders were using began to limit their ability to buy these stocks. Trading212 was one of the worst offenders.
How Trading212 Purposefully Preyed on Its Customers
In our opinion, Trading212 purposefully removed the ability to buy AMC, GME, and other meme stocks to help the short sellers who were on the brink of bankruptcy, like Melvin Capital. They claimed it was due to "market volatility" and "risk management," but we all know the truth.
And if that wasn't bad enough, when the stock market opened at exactly 2:30 PM UK time, Trading212 would shut off the app for several hours and not let anyone on the app. Convenient timing, don't you think?
But wait, there's more! Trading212 has a little-known practice of lending people shares, even though most of their customers are against it. They claim that users agreed to it when they signed up, but let's be real, who reads all that fine print? The problem with this practice is that the user that owns the shares may not vote on important matters that affect the company, such as electing board members or approving mergers and acquisitions. And surprise, surprise, Trading212 has conveniently not let users vote on important matters before. It's likely due to the fact that 100% of their shares are being lent out, and many of their users are not aware of this.
Trading212: the "Predator" in "Predatory Behavior"
So, what can we conclude from all of this? Trading212 is a predator that preys on its own customers. They limit the ability to buy certain stocks to help their hedge fund buddies, shut off the app during key moments, and lend out shares without fully disclosing the implications. And when confronted about their behavior, they don't even bother to answer.
To add insult to injury, for many months, Trading212 did not allow new users to sign up. Was it because they couldn't handle the influx of new users during the meme stock craze? Or was it just another way for them to control the market? Who knows?
The fact is, Trading212 has yet to face any consequences for their predatory actions in 2021. So, let's hope that karma catches up to them. And in the meantime, if you're a Trading212 user, be sure to keep a close eye on your shares. Who knows where they might end up?
What's Your Reaction?