As retail investing booms, Facebook shuts down stock trading groups

Facebook Inc removed a popular Wall Street discussion group, Robinhood Stock Traders, after its founder said on Thursday the move was a pushback against discussions this week that drove up the share prices of GameStop Corp and other companies.

GameStop, AMC Entertainment Holdings Inc and BlackBerry have been at the center of a market war in which individual investors have bought up shares through social media such as Reddit, using trading apps such as Robinhood and squeezing hedge funds that have made big bets against the troubled companies.

Allen Tran, 23, of Chicago, who founded the trading platform "Robinhood Stock Trader," said he woke up Wednesday morning to a notification that Facebook had shut down the group, which had 157,000 members. The notification obtained by CNN Business did not detail the group's violation of its policy regarding "sexual exploitation of adults."

“We’re the first ones standing on the picking tree that’s going to be chopped off because we’re on Facebook and not a free platform like Reddit,” Tran said, referring to the discussion site’s generally light moderation.

He said some of his group members have made tens of thousands of dollars on recent trades that first became popular on Reddit's WallStreetBets forum.

Tran, who also runs a 20-member HaiKhuu trading group on chat app Discord, said he has never seen adult content in the Facebook group.

Facebook confirmed the news but had no immediate further comment.

Tran said institutional investors are trying to diversify retail traders.

Facebook suspended Tran's group on Jan. 7 after labeling it a "dangerous organization," according to CNN Business, though the company restored his privileges after he called to contact the company.

“Because these large institutions are frustrated by the success of retail investors, they are trying to target any group they can,” Tran said.

Tran fears that the replacement group he formed to continue the discussion will also be removed.

In November 2020, a media outlet published a feature article on Tran, in which he said his group on Facebook was the largest of its kind.