customers' holdings in parts and they're trying to essentially build a firewall around that by not allowing those exposures to go we have a lot. there's a lot of trades that would kick in that could leave somebody on the hook >> game stop by the way, which closed down is now up 30 or 40% in after hours fast "fast money" starts now. >> tonight on fast, back in the saddle markets roaring back after yesterday's selloff. the posting, the biggest since november old school traders taking back control and where do stocks go from here. plus trader triple play. can they keep up gains what the traders say about these stocks and we're diving deep into the reddit rebellion

grabbing the attention of capitol hill we'll break down a change. we start off with a robin hood revolt the trading an sparking outrage after he stricting trading in previously high flying stocks like game stop and amc kate rooney has details. kate >> a lot of back and forth with robin hood today in the last hour, saying that they will allow some unlimited buying of the securities they started buying tomorrow. a spokesperson telling me they will continue to monitor the situation. they might make adjustments as needed but they say to be clear it was a risk management decision and it was not made on the direction of market makers they route to. that in response to some confusion and arrangements they have with citadel securities and companies like that. they are beginning to open up trading for some of these securities in a responsible manner, they say

to take you back to just this morning, robin hood had been eight highly shorted securities based on recent volatility this included game stop, american airlines, amc, and others robin hood late in the afternoon said they may close some, quote, at-risk positions. we'll keep an eye on that as well robin hood was not the only firm to do this we had interactive brokers do it tv maritime and schwab raised their requirements for some of those stocks as well from what we saw, robin hood really is getting the brunt from it everybody from wrapper to bar stools, port now chiming in with criticism. we have lawmakers from both sides of the aisle alexandria casio-cortez called the move unacceptable. senator ted cruz piled on. he's on the other political side of the spectrum but said, quote,

let the people trade alongside a statement announcing some of those restrictions senator cruz also retweeted and reposted ocasio-cortez's tweet saying on his own page, fully agree. a lot of changes here for robin hood back to you. >> who would this thought game stop would be the uniting force. kate, thank you, kate rooney we ask the question tonight. is it robin hood's job, e trade, ameritrade's job to protect the individual investors here? the irony is rich, guy, for robin hood here they are -- this is the perception of the reddit army. the minute they're making money, they get shut down >> uh-huh. you can understand that. listen, when we started the show 15 minutes ago we did it to empower people

we're never kond sending we try to empower people navigate markets i think robin hood was trying to do the same thing. there's something so condescending about that, it makes you really -- it makes you mad. you can understand why people are infewered and it makes you wonder out loud why robin hood would do -- and others as well, why would they do something like this knowing the ramifications this story is in the early part. but you wonder who the cast is right now. i think it's too little too late that's my opinion. again with the situation being extraordinarily fluid. >> talk about biting off more than you can chew. mel kin capital's position brought that hedge found its knees and had to be bailed out here these platforms are saying we need to protect you the

individual investor from yourself dan, what do you think of all this because the position of the platforms, to be fair, is risk management on their part, they could be on the hook for a lot of losses. >> well, i think you make a good point. these platforms have a fiduciary responsibility to their investors. in the case of robin hood they have lots and lots of investors who invest in the private market they don't want to see their clients get hurt it's not a great business, if you're in the business of asset gathering, which is essentially what they are in, to see your client's assets go to zero ultimately you lose clients that way. they have a massive p.r. problem right now. if we they signed up five million new accounts in 2020 and a lot of them are going to be annoyed with what happened here. they're not likely to stick around on this platform. there's a lot of things going on right now. at the end of the day, this has

become a very popular, ok, free online trading app on your iphone that's that simple we had the same conversation three years ago about kwibies. i'm not telling you there's not some jean in uses on reddit's wall street bets and making smart decisions about investing. this is not about planning for your future. this is not about some sort of overthrow of the wall street system or anything like that this is just greed that's all it is i'm not demeaning anybody who's made money doing it this way but let's call it what it is. >> the platforms as you mentioned are facing a huge pr issue at this point. how do you think they untangle themselves they're getting the heat from regulators that is not an enviable position to be in >> i think ultimately you have some knots being tied and they're going to be too tight and have to be cut from regulatory's perspective

we've seen a phenomenon. we saw this during the dot-com run-up it resulted in the institution of practices that were restricted on day trade rules. those day trade rules were created by the regulators and the execution of the trade rules, when they get behind what's happening with the communication about the stocks, if the communication is legal and rightful, that will be allowed, but there's going to be limits on to what extent instructions or recommendations can be made. those rules will be applied and the brokers will fall. i think the situation will work itself out they've got to ride out the storm and ultimately they'll protect investors. >> tim, what do you think of this whole situation the platforms change the rules of the game in the i don't know what inning of this game >> well, we've seen this at different times over the course

of the online brokerage community. even some of these platforms that are there really for the retail, the retail audience and to da mock ra ties, etc. we had a few years back, during a crazy day they actually stopped trading. the argument at first was to protect people from themselves people do not want tone protected from themselves. again, if this was a risk management issue at robin hood, how did their systems or how did they get that off sides in the first place that they then -- were they lending stock that they couldn't then source and were they caught in the middle of these trades. that's a different question. overregulating markets really scares yes of course, first of all, there need to be rules and no one should be manipulating the market but bringing in more regulation

against people who actually feel like the system is rigged against them is part of the foment here and we all know how this has been transcending but this has been an issue with populism who is the arbiter of truth? remember that from social media? who's the arbiter of what risk you should take with your money on the internet. i think that's why this is such a powerful issue and why people are very upset. >> you were making that point on our call midday today that it's corporate america, tech focused companies making the decision as to which groups have their voice heard. that voice may be through a tweet or a facebook post or through a trade, and which ones cannot >> it feels like a similar conversation we're having much of 2020 about the large tech florms, the power that they yield.

obviously this is just another example that regulation is coming to these digital worlds right now. it's one thing to say this wall street reddit thing is a mob and a bunch of every day people. i think it's again a bunch of the big players manipulating the mood of the crowd. there's no way that this could have happened that we've seen over the course of the week if there weren't big players just kind of instigating much of this activity and driving it higher to me, i think there's a lot of, you know, fingers to be pointed. it sounds like the senate, it sounds like congress it sounds like there's a lot of people with their knives out i don't think anybody really wins at the end of the day other than a bunch of s.e.c. and ex-s.e.c. lawyers. >> there are i'm sure plenty of individuals behind every single handle on wall street bets but as you mentioned there could be big players masquerading as

such regardless, guy, if the retail traders in there, if the reddit army is in there and they made money and they're seeing today that they can't -- they can't initiate a new position or their trading was restricted while all the other guys on wall street are free to do so that seems to stoke the anger even more. >> it should it absolutely should and again, not knowing all the details as to why some of these platforms are restricted or stopped, i don't know the ins and outs of it but just on the surface it has to be infuriating. if you're saying i finally did it on my own, i'm empowered, i beat the system at least for a day or a week, whatever it is, and all of a sudden midstream they change the rules of the game, same way they changed the rules when the hunt brothers had their position in the silver market it's the same thing.

its has to be absolutely infuriating. i can understand the ire and the angst and the vitriol coming the way of basically the wall street and everything it lepts. i totally get it i think some of it is fine i think some of it is probably misplaced but i understand where it's coming from a hundred percent. >> it's an engagement we are seeing right now, is it sustainable? what does it mean for the platforms? our next guest, lichd p richard p petto. it's always great to get your thoughts when you say that the volumes are here, it's because we live in a zero commission world >> yeah, certainly you've seen trading just multiples of what it was prior to -- when you had paid commissions. zero commissions, the state,

work from home environment, as well as we've had a performing market as well i do want to take a moment -- i've been listening to the show -- and i want to say a couple of things about the e broker, which i've followed for a number of years. if they can do it -- another trade for a customer i think the discussion points. i don't think that's it whatsoever if they can do another trade they're going to get paid for another trade. they want to see more trading. i talked to both robin hood interactive brokers, you know, it is the risk management side it is coming from other places as well, from the clearing houses, but you can see, when you put enough stress on the system that you can have some not so good things happen like

we did with lehman brothers. so when thomas peterfy talked about the integrity of the clearing system, he's concerned that, you know, there's -- these movements have been dramatic i think everybody on the show will acknowledge that. so they -- when you have dramatic movements like that, they definitely stress that the capital, the deposit requirements, that's what's being passed on, you know, to the blokers, and just like dan said, the brokers do a have a firy requirement to their investors, it's their capital. this capital it's under dramatic stress when you see movements like this and, you know, no one would have predicted that some of these stocks can move the way they have and you'd have such a mass movement we traded 24 billion shares yesterday in the market. we normally trade -- this year

we traded about 14 in 2019 we only traded seven billion shares that's what these brokers have sustain on, literally multiples of the volumes that we did a couple of years ago. le >> rich, can you sort of simplify this for, you know, people like me the options expiration on friday, i mean, what role does that have in the decision today to restrict trading? >> it's the capital requirements at least with one of the brokers that i talked with that the clearinghouse is now requiring so much capital from these positions, as they take a two-day settlement so much dhaep it's straining -- it strained them up. the capital that they have overall as a firm, that it's putting at risk -- and you saw -- you know, if a probing raj firm doesn't have capital,

we've seen whack happen. the -- what do you call it the follow-on effects of it, the loss of confidence and who will lend you money and who won't, and you've seen at least -- they were all restricting the trade now is what i'm told, but certainly a very knowledgeable, you know, go guide the clearance system, get on the network today and say, hey, this is challenging the system he's overcapitalized so he's not worried about his capital but he's worried about the integrity of the entire -- >> uh-huh. >> -- when you put that much stress on. >> we're in a zero commission world, these folks are not making money obviously on trader commissions. they're making money somehow i guess my question is, maybe they're answering to somebody else and maybe that's where we should be focused on really, you know, why things played out the way they did today i know that puts you on the spot

a bit but that, to me, is the crux of this entire thing. >> i agree with that first, they make their money on floater. they get paid not what they used to get paid but they are getting trade portfolio. especially in these stocks that are trading enormously right now. where i think, you know, as we look into this anded reexamine it, it will be reexamined because there is a lot of pressure as you talked about the -- you know, the marketing impact and the brand impact this is having, but people, it will be investigated and at least what i'm being stheeld the capital requirements that are being passed on from the clearing houses are limiting what they can do you know, it's making things risky enough where they can't -- they don't want to take on more trades, because it risks their capital and then once you get

into a -- you understand, i think we all understand, you goat into a situation where your capital is the confidence in the capital, it can be a spiraling effect. >> all right rich thank you so much for your time. richard petdo. of piper sandler you nailed it in terms of the clearinghouse angle and the system here. the perception, though, is the perception and perception may not be reality in this case or it may be reality. we don't -- we're not a 100% su. that's not easy. >> yeah. no, it's not listen any customer has a right to be upset an the service being provided to you, especially when it comes to your money i think that's a major point i think some of the changes that are going to come, i think before we even see further regulation -- and i agree with

what tim said before, who are the arbiters of these sort of things, but these companies have fiduciary responsibilities it would be worse if rockin hood went un. you remember the pal by station tagss when mf counter went under? it's big stuff ok so no one wants that to happen we use this expression every once in a while. i don't think it's used properly, that whole black swan event. wouldn't it be perfect at the height of all-time -- you know, with the markets, with interest rates at all-time lows, with deficits where they are. the general euphoria about risk access that a black swan came along and blew up the whole thing. >> yeah. >> you know, people were calling the global financial crisis for years but this is the sort of thing you want to tamp down pretty quickly, i suspect. >> james, what do you do if you're a share holders of american airlines. american airlines is not a game stop, not a build a bear

that was put on the restricted list as well this is a rolling heavily shorted listed stock, it seems. >> they'll be looking for traders. they're going to look for opportunity wherever there's trade. nowhere is safe if there's an equity that can be influenced and traders want to take advantage of it. it's just human nature of greed. regulators are watching, they're studying this very closely in this ecosystem of free enterprise, we have protection, we have protection from independent government officials who are watching they're very smart it's a very, very, very, very quickly changing situation it's complicated there are rights on both sides of the investors who are seeking profits and those investors who may hold the decision. it's timing wise we'll see this thing come to an end pretty soon. >> breaking news on robin hood

leslie has the story >> hey robin hood has been facing some customer revolt today amid its decision to limit trading on certain securities we've learned that robin hood is drawing on some credit lines with some banks in order to shore up its balance she'd according to a person with knowledge of the situation lenders include j.p. morgan and goldman sachs. we've reached out for comment but we haven't heard back. we don't know anymore about the financial situation with regard to robin hood. we just know that they have pursued credit lines in order to respond to some of the recent activity melissa. >> ok. leslie, thank you. coming up, does the reddit rebellion have your head spinning we'll dive into the portfolio protection trade ahead but first we're mop forring all the after

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welcome back to "fast money. ano another big night of earnings. letter x and letter v. seema, take it away. >> let's start for v for visa. volumes falling 21% in the first quarter. however, the credit card company did see, quote, resilient domestic spending in most countries and strong online shopping trends helped the company's profit come in higher than expected. it launched an $8 billion buyback program. trading about 16% off it's 52-week high analyst josh beck did downgrade shares of visa and mastercard yesterday from overweight to sector weight writing that there could be more challenges ahead for the payment giants as they navigate the pandemic. u.s. steel slightly higher in

after hours. ceo david burrow striking an optimistic tone about the rest of the year we are bullish shares of u.s. steel have had a strong month so far partly on hopes that biden. melissa. >> seema, thanks tim seymour, your pick >> yeah. look, i'm happy with these numbers. i'm happy with the balance sheet. i'm happy they closed out a transaction for river steel in december i'm glad this was 25% a few months back. it's down to 15% but i think it's going higher. they're at 12-year highs lower volumes have certainly been part of the top line miss, but at more profitability, again for a company that was highly

highly leveraged with steel prices with prices where they are, i think the street is trailing, i think they're very far behind. i've been longs for five months and i stay long. >> guy, you feel the same way? stay long? >> yeah, i do. i think tim is right it's pulled back 24 traded a couple of weeks ago. probably traded down to 17 1/2 or 18. i think tim would agree. it's about the story the story is demand is up and it seems to be increasing prices are higher. and oh, by the way, u.s. steel was forced to become a much better operator in an environment where their stock went down. they had to take a look at themselves maybe that's better. they're operating better if you believe as i do that the u.s. dollar is going to continue to get torched this year, resource stocks work and i think retail steel is one of them that will >> here's what's coming up next

on "fast money." >> they want no part of this speculative craze. he's waiting for the next major pullback where he plans to invest, next plus, uber shares driving higher today. should you hop into this trade that and a lot more when "fast money" returns

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our next guest wants no part of the craze. he's waiting for the next major pullback to add money into stocks let's bring in taupe great to see you >> great to see you. >> you said that in the notes that i have that we're seeing a dynamic play out in terms of the short-term impact on the market of this reddit army. but that the long-term market fundamentals are intact. does that mean that you believe this goes away >> so mel, i was thinking about this in the context of have we ever had a 60% railing off a major bear market economically based march low and did you start that next year after this 60% railing off that match low up 3%. then you had some kind of flash crash. some kind of market structure fear come into play and of course, that was 2010. as you know from some of the written stuff we've talked

about, we were tracking from the summertime of last year, we were trackingwhat took place. you opened up 2010 with a 3% gain and out of nowhere, out of euphoria and a lot of commitment, you just had a series of correction le an 8% in the first couple of weeks in february. and a 15 percenter the flash crash created ripples in the market. it was the beginning of a correction so i am so excited about the intermediate to long-term prospects of excess lick witty couples with a sink synthesized global recovery but we need a little bit of air to come out here of the balloon here. >> i want to get your thoughts about what is happening with the market dynamics when it comes to

this group of investors who have exerted themselves and forced hedge funds to change the way they trade, at least temporarily. do you think it's a temporary blip and do you think there are long term applications >> there was a great interview yesterday which talked about the open interest in options you know me long tough, i'm a data guy i go by data here's the first knapp data comment i'll have in a while i think the idea that small option traders are making all of this happen is like believing that, you know, somebody in a viking helmet organized the capitol riot i think there is real money behind both sides of this trade, and of course it is affecting on both sides the small investor. but when everybody else is in a chaos, i think the strength that i have is to sit back, have a little bit of perspective and ultimately determine what really

drives the market and the economy. and that's availability of money. we have a historic level of availability of money. the time to get worried, as you know remember, mel, you take dwyer dooms day clock, last august when it converted. it's the opposite now. you're coming out of the recession. you have an extraordinary amount of stimulus from fiscal, monetary and interest expense savings. >> i'm so so write tism was going to jump in. i think he's frozen, so i'll go ahead and jump in. >> ok. >> i don't want to force words into your mouth but it sounds like jerome powell is at the heart of what is going on, including what is going on with game stop. >> a 100%. how many times have you been on set? i wish we were on set again. how many times has jerome powell

given you the game plan and geniuses like me trying to figure identity if it's right or wrong. the guy told you what he's doing. we're at 1.4% pce. they said they wanted above 2% for a year i'm not a mathematician. 1.4% is below 2% now we got to get to 2% before you're there for a year. you've got an extraordinary amount -- see, what people miss, mel, is the still u lative effect we talk about inflation and pricing power. all this comes into -- yes but expenses collapsed fore government, for corporations and for households >> tony, i wish i did see you. i can't see you because i don't have a return, as they say in the business but it's exactly that. the fed wants inflation above 2%

per year embedded in that is they think they can control it. i'm a big believer in pin nation in spades. what about it goes from 1.4 to 3 and a quarter, three and a half. that's not something the market is expecting. >> i think that will create some congestion if that happens but i think up nainflation is going t go up. you're going to bring in the march, april, and may of 2020 numbers. you're going to have inpopulation from that price drop 56 the summertime you're going to be anniversary'ing. i think settle back, treat it and look at the -- does it shut down money the guy infantrying it keeps

telling you he's not shutting it down pricing power for companies is a good thing. >> right >> that's why it's a surprise to the up side, i think >> tony, thank you so much >> thank you. >> his playbook includes a lot of the reopening trades. james, what do you think of that playbook >> i think it's a great playbook once we settle on what this sentiment is to do in the short term i agree with everything that tony said. the problem here that we keep going higher in different pockets. the market somewhat cooled off here earlier this week we've seen a resurgence around these names, the reddit situation, the daily option is four time its normal that's not sustaining. i think we'll go back to some type of bullish markets. e-commerce, 5g, clean energy is going to do well we're looking at infrastructure play perhaps to buttress the economy going forward. there's always going to be

pockets and i agree with what tony's pointing out in terms of a pullback in terms of the short term temporarily before we continue to take our optimism forward. >> coming up, comcast, general motors and uber next how are the options market a protection straight ahead when f "fast money" returns

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. welcome back to "fast money. time for the trader triple play. comcast, gm, and uber. the parent company of this network up 7%, biggest gain since last march it also added 11 million subscribers to peacock, the streaming service. guy, what did you make of the quarter? >> great quarter high speed internet killed it as well this is what i make of the quarterback. traded up to 52.30, i think, right in line with a november high it's had a huge run. the question you have to ask yourself now is was that the catalyst to take it off the table? i think the stock can grind higher from here if you trade it, i think you're

looking for pullback in the mid to high 40s. >> do you extrapolate the success of peacock to some of the other streaming services >> yeah. i think it's also part of the bear story i know our friend tom rogers would disagree that a lot of these content owners, pulling it back from netflix, obviously, the office going to peacock is a huge draw. there's a lot of reasons people chose disney plus. lucas films, marvel, you know, i mean, so the content's really important. it's going back to the homes of these places and it's going to end up looking like your cable bill before. you're going to have a bunch of floating apps on your tv this time around. >> up next, check out general o. the company saying it plans to offer only electric vehicles by 2035 just the latest step in gm's plans to be carbon neutral by 2040 that is amazing if they can pull this off

>> yeah. it's ambitious and it's risky. the gas fueled trucks and suvs right now are key to its profits. gm has a plan that brings self-driving cars to japan they're going to supply the batly technology i think gm has a really, really good opportunity to catch some of the lift. we talked about this stock being underpriced. general motors has got the smartest folks in the room to attack this. i think they get lift on the battery. i think they get lift on evs for other markets. i continue to see up side for it >> 90% of sales today at gm and 100% of profits are the fossil fuel burning cars. guy, how many times is gm going to add market cap for the same thesis >> good for tim, by the way, and karen. we've been talking about this for a while. we played the math game with

them the market -- the broader market's trading 25 times forward earnings gem motors is is earning about seven or eight put a multiple on, do the math anywhere from a 60 to $72 stock. they finally did it enough where the market listened to them and they're getting credit for it in a meaningful way although i would rather have a '68 cha very well -- super chort by the way, maybe convertible -- i understand the direction of the rest of the world. >> wonder how many people know what a chevelle is it sounds like a beverage to me. but uber shares, analysts saying they expect ebida to be positive and that the economic reopening will provide demand. dan, we'll go to you on this one. >> pretty bullish notes. there was a couple of bullar notes out on uber.

we continue to push the reopening trades out further and further. i think it will continue to have tail winds as the vaccine improves over the next month or so there's a lot of moving parts there. this year -- or a year ago this time, i was saying they should get rid of eats, get rid of some of those noncore businesses. each had become an important part of their business during the pandemic if people don't like the earnings and they like the idea of ebida breaking evening, this stock's going to work. they don't report for a couple of weeks or so i'd be careful, because you might be disappointing if it's trading at all-time high, and the numbers are guided to disappoint a built >> people want to drive in these cars and eventually driverless cars they're positioned theoretically for that in the future

>> there's so much practical itself i rented a car it's been sitting in the garage the whole time i've been here. so much more convenient to hail a ride from uber it's prepaid i know when i'm going to get there. i know when i'm going to get back it creates an economic engine for employment in times like these where people are getting laid off, they can go to an uber, they can go to a competitor to find employment. i think uber's a solid, solid play obviously they've got a lot of capital use constraints. i think it's the wave of the future i've been ubering it i think that makes a lot of sense for me just get an uber next time totally. >> coming up we've got a special edition. tackling the reddit rebellion coming up at 6:00 pem tonight.

what may be pointing to more lali d 're breaking down the action don't go anywhere. much more of "fast money" after this

call it the reddit

rebellion, the short squeeze saga, whatever you want. it is shaking up wall street and putting a lot of volatility into the market here's a way to buy insurance with options bn . >> if yesterday did not get your blood flowing, i don't know what will there's a lot of core positions tossed out yesterday as the shorts wore squeezed i'm looking at microsoft, right. take a look at the feb 240 put that can be purchased for about $7 or about 3% of spot essentially what you're going to be doing is outlaying just today's gain in order to protect your position from spot. think of it as a zero deductible insurance premium. you're protecting from the spot. if it grinds higher, you participate. in the event it sells off,

you've only forfeited one days performance of protecting it you want to protect other core holdings and protect against heightened volatility that we've seen over the last couple of days >> dan, what did you think of the strategy >> i love it i think he's bringing up a good point. it's performed well. they put up amazing numbers. it's hanging out near the all-time highs if you are worried about the broad market and you want to hold on to a position, but you don't want to give back gains, this is a good way to spend a few percent of the underlying. i think he makes a good point. you do not want to do this too frequently it would be a huge drag on performance. >> tim, do you think now's the time to buy some protection? >> 27 .19 on the s&p's 50-day. we talk about volatility there's been a step function up

really over the last, you know, call it the last couple of days, but i don't think that just runs away from us even though the thesis for the longer move higher, i think a lot of people continue to endorse. so in protecting yourself today and tomorrow, you know look, it's very expensive relative to where it's been. i think we'll take another shot lower. i think today is not the place to chase >> good to see you be sure to tune in tomorrow friday 5:30 eastern time up next, final trade turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim.

♪♪

time for the final trade lisa go around the horn. james. >> i love volatility i've got a new front launch tomorrow that's my pick >> all right tim seymour. >> mustang '66 convertible over the cha very well. two billion in catch, stay there. >> i think chavelle on the rocks sounds good. >> i know the stock is kind of up changed a little bit, down

10% from its recent all-time high i think you pay that back toward 2.20 >> guy >> hi, mel >> hi, guy >> we've learned a lot a fascinating week. >> yeah. >> everyone needs to sort of take a step back and hit the refresh button with that said, the chevelle was a great car. i'd rather have a '67 gto convertible. that's preendura bumper. >> it's obvious. >> it's obvious because the bumper didn't hold paint that well >> is there a final trade embedded in this >> blacks stone, look at the quarter they reported. >> chevelle, gto

i don't know we've got a special bonus edition of fast dedicated to the reddit rebellion and that starts right after this break

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hey, "mad money" fans. cramer's off tonight but we have a very special hour ahead for you. >> announcer: it's the reddit rebellion. main street versus wall street david versus goliath age-old conflict reignites in a thoroughly modern arena. armed with lightning-fast communication and trading platforms, a battalion of independent investors take on towering hedge funds >> i've never seen it before and what wall street bets, which is really driving, this what they've done, that's a site on reddit, what they've done is target large short positions

now, they have not targeted small short positions. gamestop was 148% short. >> announcer: but the old guard has deep pockets and deeper reinforcements >> the lack of integrity in the system is the precursor that caused gamestop to be sold short 136% and for people to try to pile on and destroy a company in front of our eyes. that to me feels wrong that feels pretty un-american if you ask me >> announcer: who will come out on top >> an investor doesn't own gamestop a speculator owns gamestop let's not confuse speculating with investors gamestop's business was going down the toilet. their revenues were declining. their ebidta was negative. they had no earnings and they had an enormous market cap this is speculators playing around >> announcer: here now is melissa lee. great to have you with us tonight. let's get right to it. joining us for the hour, cnbc contributors dan nathan and courtney gibson. and we have a very big interview coming your way. the ceo of robinhood will join

us in just moments meantime, as we come on air tonight check out shares of gamestop they are rallying on the news that robinhood will allow limited buys at tomorrow's open on that stock and others this comes after robinhood and other retail brokerages restricted trading on those high-flying names during today's regular session. our next guest is calling those new restrictions on trading un-american. joining us now is morgan creek digital assets founder anthony pompliano. anthony, great to have you with us tonight >> absolutely. thanks so much for having me >> what's so un-american about this >> look, obviously this has been building for a while, right? and i think that there's a bunch of investors who believe that they've been punished as savers through the devaluation of the dollar they've gone to the stock market and today they are equipped with information, communication tools, and access to markets and the friction to those three things has been driven nearly to zero and all of a sudden they start

to find exploitations in the market they find mistakes that large hedge funds have made. and the second they start to exploit those weaknesses or those mistakes, the markets get shut or these stocks, they can't trade them anymore and so what we're seeing is people who are saying wait a second, if you're going to risk capital and you're wrong you should lose. because if i risk dapt and i lose and i'm wrong, then i'll lose so all we're watching is we're just watching the acceleration where these people are going to pick up the ball and go play elsewhere. and they're going to move to the digital decentralized financial system that is a free market that operates as a meritocracy where the best idea wins if you're right you profit if you're wrong you lose there's no bailouts. there's no circuit breakers. there's no hours of operations there's no one to call to halt the trading of a stock if you're right you profit and if you're wrong you lose but that's no longer happening in american financial markets. we now have manipulated markets where the free market does not reign and therefore we're going

to accelerate the digital decentralized financial system that's being built >> there's undercurrents in this, i'm not sure you've gone on wall street bets yourself, anthony, but there are certainly a number of people who are on this forum who say they were burned by the financial crisis, and we have one open letter to cnbc, and there are numerous letters to cnbc saying it's not just wall street bets but every person affected by the '08 crash that's now paying attention to gamestop are going to remember how you stuck up for firms that ruined so many of us and tried to tear down the little guys and of course remember also back to the crisis. it was the big wall street firms that got bailed out. and not so much the small investors. there is that undercurrent there. and i think not surprisingly, anthony, you know, the bitcoin community has really sort of rallied along with the wall street bets community. why do you think there is that undercurrent there >> technology's the great equalizer. for the last decade the people in '08-09, whether whether it

was occupy wall street or ducati park, americans around the country they felt helpless, they felt like they couldn't do anything but now with technology that great equalizer we've seen a reduction in the friction for information. you don't need a bloomberg terminal to play in the public markets anymore. you can literally just have an internet connection. communicate tools. you don't have to go to the idea dinners. you can go on reddit you can go on a telegram chat. you can go on twitter. and then access to markets i no longer need a traditional brokerage account. i can simply go on a robinhood or some other peer or competitor of theirs. when the friction comes down for information, communication and access, what you see is a level playing field. and so just like people will defend short sellers, and they will say short sellers are part of a healthy market, they will make the claim we need short sellers in order to have that efficient market, to have it be a check on the bulls and on the longs, we need retail investors to be a check on wall street and if we go back in history retail was right about bitcoin,

retail was right about tesla, retail was right about gamestop. so maybe we should start to think that retail isn't as stupid as everyone on wall street thinks they are they've actually been more right than people give them credit for. and so i think whether it's wall street bets, it's people on twitter or it's just a random person that has an internet connection and wants to trade stocks, open up the markets, allow the free market to reign, and if the hedge funds are scared of competing against retail in the free market, that tells you everything you need to know so open the markets and let them compete. >> right and it is the retail investor who found a way in the system to engineer the short squeeze that brought a major hedge fund to its knees. i just want to make that point, anthony, before dan asks his question dan? >> so hey, anthony, we saw this frenzy, retail interest in crypto, obviously bitcoin. this was in 2017 coin base was that on-ramp obviously you talk about crypto as this amazing, you know,

decentralized opportunity for the everyday investor to kind of get a piece of what the future should look like, or at least the financial future but at the time, you know, coin base had its share of problems right? operationally. a very centralized network in a way. so now fast forward to this, and see what we're going on with robinhood in a way i agree with you i think the people should be allowed to trade but there's also -- there's bandwidth issues and there's regulatory issues. they seem very similar to me i'm just curious if you can draw any expenses to what we saw a few years ago in that retail craze and what we're seeing now on the stock market? >> i think what was happening in 2017 was absolutely bandwidth issues the actual technology products couldn't handle the surges in new sign-ups and in trading kind of volume. what we saw today was not that what we saw today was a specific move by a platform to stop allowing trading that would have been like coin base saying hey, you can come on our platform but you can't trade

bitcoin, you can trade everything else. right? they didn't shut down the platform they shut down specific assets and so again, i just go back to what we are seeing is an entire generation of young people that have an internet connection and they are saying the system is rigged against me. the system does not want me to win. and so what they're going to do is they're going to pick up and they are going to move to a digital decentralized platform and in that new financial system there are no circuit breakers. there are no hours of operations it's a 24/7, 365 days a year free market that you can't call anyone and halt traysing you can't sit and say oh, wait a second, we fear that rich people aren't going to be as rich tomorrow and so therefore we should address the problem it's a free market and that's what true capitalism is and what we're watching in the american financial system markets is not capitalism. and there's a big, big portion of the population that wants a capitalistic free market and they're going to go find it and they're going to find it in the

digital decentralized world. >> anthony, great to get your perspective. really appreciate it anthony pompliano, morgan creek. courtney, it doesn't seem like this is an isolated instance of discontent with the establishment. it seems like we've been seeing this for years now years in the making. i mean, anthony had mentioned occupy wall street but even just within the past year we've seen it with -- or a couple years we've seen it with maga and what fueled that. we've seen it with black lives matter we've seen pockets of this society that feel completely disconnected, underrepresented and not heard. and wall street bets sort of reminds me of those sorts of movements. >> well, melissa, thank you so much for having me it's always good to be with you. you know, i like the narrative and this may be the unpopular commentary for the evening but i think maybe this started that way and maybe there were

some people that really felt like, you know, i'm going to stick it to the man, i'm going to go after hedge funds. but i also wonder, and i do have some friends that are in that chat, i wonder, did someone just come up with a really, really good trade credidea, right? like did somebody actually see the marketplace not acting in the efficient way that it should be and make a call on it and because of the world that we live in, because we live in a highly digitized society, because information flows so freely and es, like the past guest mentioned, you can go on robinhood, cash app, you can trade from whatever venue that you want, and put a trade on and you tell your friends to put a trade on and here you have this ripple effect but what happened, however, did not stop with retail and i want to be really clear

with this. and i'm not going to go into conspiracy theories and everything else. but what i can tell you unequivocally is 100 million shares of stock trading in gamestop in one day was not melissa, it wasn't kourtney, it wasn't john, it wasn't damian. these were institutions as well. >> oh, sure. >> and whether it was momentum trading, quantitative trading that kind of went into play, which again, is not a bad thing, these are strategies that are being employed, people were making money and losing money just as they do in the markets i think this was just a little different because no one was expecting it so i think there is a bit of that sentiment coming out now as it relates to the -- how shall we put this? the discontent with what occurred, which i do think is wrong, in the fine print all these trading platforms say we can cut you off whenever we feel like it. that's the way of the world. like it or leave it. but that's the way of the world. i do believe that it was wrong you can't decide one day i want to protect you and one day i don't. because that ultimately causes a

lack of trust within our markets and we can't have that we just can't have it. >> well, here's the thing. and i agree with everything kourtney just said, but i would also 5d on the institutional side, if institutional investors got together and clueded the way that a bunch of anonymous bots did on the deep web, whatever this wall street bets, reddit stuff, and i know you guys think they sound like a luddite or this or that or whatever i've been around long enough i remember aol chat rooms and yahoo chat rooms and all the kind of malfeasance that went on around that, okay? >> you remember people pretending -- >> okay. my point is -- i couldn't hear what you were saying the point is like bear raids and short squeezes are as old as the hills. >> sure. >> and hedge funds have been regulated. banks have been regulated. okay if institutional investors acted the way that the wall street bets community acted they'd be shut down. they'd probably be put in jail or something like that so my point, we've been talking

about this now all week long, that there's no doubt about it, there's probably some really smart people on wall street bets on reddit who got on the robinhood trade and said this is a good trade, you know, this stock, the short interest is 100% of the flow and if i buy a few hundred shares here it may go up a few bucks if i start talking about it on the internet no one expected to happen what had happened institutions got in in a big, big way and they started obviously pumping it up. but there's a lot of different players now. there's algos, high frequency traders, opportunistic hedge funds. so as many hedge funds as this took out there's going to be plenty that make a lot of money and as i've been saying all week the big winners are going to be the banks, the brokers and the lawyers. >> and the exchanges because when you talk about trading volumes -- sorry, melissa. i was going to say i know you guys on "fast money" talk about where to put your money. if you didn't want to buy gamestop or amc or play in the game, think about the exchanges and the volumes that are traded on those exchanges that's where they're going to make money so there's a good stock pick for you in the hour too.

>> okay. we're just getting started here on this special hour of programming. up next we'll hear from one top wall street strategist who says there is a regime change under way. how he sees this movement impacting your money and later the growing calls for regulation lawmakers demanding answers from robinhood over today's trading freeze as we're all over that unfolding story when this special report continues that's all leading up of course to a can't miss interview. the ceo of rob inhood will join us to talk about the latest from the reddit revolt. ayun st ted

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welcome back to this special report, the reddit rebel crohn stocks soared on wall street today with the dow gaining 300 points the rally coming as high-flying names like gamestop, amc, koss and express tanked tom lee, good to see you again >> great to see you.

>> we chatted about the impact of this movement earlier this week and then we saw a sell-off, tom. so i'm wondering how you think about whether or not this movement, this dynamic on wall street is causing any sort of ripple effects on the markets. >> you know, one thing to keep in mind for the viewers is this total u.s. stock market is about $33 trillion of market cap and some of the market cap of, you know, if you took even the ten names that have gone parabolic and that were named in those threads, it's about 50 billion. which means it's like 0.00001% of the total stock market. i guess what i'm saying is there's a lot of activity and it's actually had a lot of impacts across wall street but in terms of aggregate effect on the market's valuation it's tiny >> no, i get that.

isn't there, though -- i mean, do you eliminate a few zeros because of the power of options? and if you have an options position that value it's 50 billion, it's a multiple of that, and it's not just, you know, that particular stock, it is also the other stocks in combination. >> sure. yes. that's right i'm oversimplified because there were a lot of corollary effects. you know, people had correlations in their books go kind of wonky and when somebody's hedge funds had to shrink their long book it was affect a lot of traditional managers so there clearly were effects. but to me i think that the bigger story to me is still that this is a regime change. i think that there is over the next ten years going to be a tremendous amount of new money coming into the stock market and that -- we think it's almost $6 trillion it's not going to be handed to an institutional investor or to a hedge fund or to a mutual fund

manager. i think a lot of it will be self-directed and self-managed money. and so i think what we're witnessing now is not going to go away but i think it overall will contribute to a higher p/e for the market because equity versus premium will fall >> so more and more individuals will be in the market. so even if you discount the impact they're having now, if you calculate the market caps and factor in the power of options, et cetera, in the longer term they're going to be a much bigger impact on the markets. do you think that changes the way institutions invest their money? >> yes, absolutely i think it's going to be a bitter pill to swallow but for the last ten years -- and you know, most -- the average tenure of a fund manager is 8.7 years so the average person managing a professional portfolio started after 2009 they've operated in a world of declining rates, zero net capital inflows into the stock market, essentially zero

presence of the individual investor and the growing presence of algorithmic and systematic trading so i think the rules are now trading for those same people because the next ten years machines are much bigger now, but if there's retail inflows they might be countercyclical to what an institution does i think overall it's actually quite healthy. that's why large investment banks that have both retail and institutional tend to have a lot of balance because they can help with order flows i think it's a healthy dynamic but it's a brand new -- it's really a brand new environment >> tom so, great to get your thoughts thank you. tom lee of fundstrat kourtney, what do you make of that it's a bitter pill wall street has operated in a certain way for i don't know, forever. and here we are. if tom is right and this heralds some sort of a change where retail or an individual investor has more power in the market, that could change things >> look, melissa, it's time for

change right? like let's be honest here. there's some good change and some bad change. but i think tom is a thousand percent right with his assessment and honestly, it might make it fun again. right? let's think about this if you now have to readjust your risk models, you have to think about additional inflows i mean, look, institutions aren't struggling. close to $40 billion over the last seven days went into institutional funds. they're not going to struggle. but ultimately now you have people that are going to be participating in this marketplace. let's look at the positive side of that. you have additional liquidity. you have additional ways to uncover potential gains on names. you have people that might take the other sides of side of your trades whether you like tesla or don't like tesla there's got to be somebody to buy it if you want to sell it and vice versa. so i think this is healthy and it is going to be a reset and it's time for that reset >> dan >> well, maybe it's time for that kourtney just mentioned that it may get fun again. well, i remember the last couple

times the stock market was really fun in the late '90s and it crashed 50% and many of the names that were having the most fun -- kourtney, it's really hard to do this like this okay so the stocks that have the most fun lost maybe 70%, 80%, 90% of their value. there was nothing really fundamental to those stories at the time and the market participants were really excited about it. okay the next time investors had a lot of fun was flipping houses and then the banks got involved in creating a lot of really interesting leverage products. well, that didn't go too well for the stock market either. and a lot of investors got taken to the cleaner and their financial futures were ruined. okay so here we are in the last year we had a mini crash, let's call it 35% from the february 2020 highs. it lasted about a month and a half or so the fed started printing money the fed took interest rates to zero they said they're never going to let them go higher they moved the goalposts on inflation. they're going to let that run hot here they put money in people's pockets who couldn't go to work.

and then all of the sudden they started legal gambling on their iphones. okay and stocks only go up. this is the only thing that they know right now so i have a feeling that the fun's about to end it is a pun game playing musical chairs when you're a few years old and you don't know what the heck's going on. but when the music stops and you lose your chair it's really debilitating and it can be debilitating for a while so to me i don't think there's anything really fun that's going on right now in the market it's not us versus them. it's not the establishment versus the guys trying to stick it to the man. this is real stuff it's people's money. and you know, we talk about these things pension funds are invested we have this massive unfunded pension problem here and that's one of the reasons why so much money has moved out the curve, the risk curve so -- >> dan >> i just don't think it's funny to play with financial futures like this. >> i completely get what you're saying and i understand it. but at the same time do you believe that the market should just be open to all of these traders to allow them to make their own decisions? >> of course

100% i do not disagree. everybody -- every citizen should be allowed what the heck they want with their money they should download whatever app they want to do. but i just don't think it's particularly fair -- i think that a lot of the behavior of late is just -- it's not well intended and it's really about sticking it to the man. i've spent some time on these reddit threads they're like we don't care if we lose all our money, we want to take them down that is a sort of financial nihilism it's not particularly good for a capitalistic system in my opinion. and some people will come back and say well, isn't that what hedge funds do they do bear raids and all this sort of stuff. maybe they do. okay but again, when they act out of line, out of regulation, they get -- they get their hand slapped. so to me i think that there's massive regulatory action. i don't think these people know what's coming for them in the next few months or next few quarters >> we are still in the early stages of this story that's for sure. still ahead here, a congressional crackdown. growing calls from lawmakers to level the playing field. coming up we'll hear from one

congressman who says it's hedge funds, not individuals that need to stop treating the market like their personal playground. and we're getting closer to the can't miss interview with the ceo of rinobhood that is coming up when this special report returns

we have got a very big interview coming up with the robinhood ceo. you will not want to miss that that is later this hour. lawmakers are demanding answers this hour to trading halts today on some of these high-flying names including your next guest. he put out a letter today reading "we're done letting hedge fund billionaires treat the stock market like their personal playground, then taking their ball home as soon as they lose." joining us now is democratic representative ro cakhanna of california >> thank you for having me >> there are going to be hearings and i wonder what you

hope to accomplish >> this just expose the deep flaw in our financial system what you have is hedge funds they take out these short bets then they go on television and they tell everyone sell. it's total manipulation. it's not encouraging productive investment we need to have better regulation and better enforcement on these short sellers. and gary gensler i think will do that at the s.e.c. >> is it just short sellers? is there something about short selling that attracts this kind of scrutiny? because people on the long side of trades do that same thing and liet's be clear. when you say manipulate that is not the definition of market manipulation as put forth in securities law >> i'm not saying it's insider trading although i'd need to look at the -- exactly what happened i do think most americans will think if you're shorting a stock and you have something to gain and then you're going on television and encouraging people to sell that stock that that's not helpful and that people are making a fortune on this some of the laws have to be enforced and we need regulation

over this kind of predatory speculation. and then when you have finally sort of investors at reddit try to take their own action because our system doesn't allow it, you have robinhood stop the trading. i don't understand under what authority they are violating the terms of their service and they're claiming they have capital requirements what capital requirements? they aren't invested personally. >> so what is your message to the wall street bets community, congressman? i mean, ultimately do you say keep going press them bring wall street to their knees? because this is how we show the inequality of the system >> no, they're americans that have the freedom to do whatever they want. my job isn't to tell them how to invest my job is to make sure that they have the same rights as every other american and i don't understand how you can have a service like robinhood which under the terms of service tells people that they can trade and then just stopped those terms. and by the way, robinhood, you

can ask the ceo when he comes on, makes part of their money by selling this data to the hedge funds. so there is something there that they have to gain by listening to the hedge funds now, i don't know what their rationale is i do know they put out this statement saying they have capital requirements and s.e.c. requirements but i don't understand what requirements they're not personally investing in gamestop. it's the investors they're just a neutral platform. so how can they just stop suddenly the trades with no notification >> yeah. i know this is hard to sort of plot this out, congressman but you know, in your view do you think that there will be more regulations being placed on the likes of a robinhood in the next year or two >> yes there are going to be three consequences of this there are going to be more regulations on hedge funds and finally i think people are going to say the carried interest loophole needs to go. the financial system isn't working. people are angry out there at what's going on. a second there are going to be regulations on robinhood that

you have to be a fair platform but the biggest thing and this is important to know, 48% of americans are not in the stock market there are many people who want jobs, good jobs, and this investment isn't helping create our productive capacity. it's not building manufacturing. it's not building investment we need an economy that's going to build things, make things, not just speculative bubbles that is not helping 50% of americans. >> congressman, thanks for joining us >> thank you >> representative ro khanna. kourtney, what do you make of this it sounds like they're intent on trying to change the system. >> they are. and regardless of kind of why that's come about, everything happens kind of in arrears it would have been great for someone to have dug in the fine print sooner but if this is brought to the forefront, the need for -- i won't call it additional regulation because that scares the market but different regulations in order to keep our markets safe for all participants i think everyone would be open

to that. and i want us to really be clear from a statistical perspective, like let's not sit and pretend by allowing retail investors to participate that they're suddenly going to overthrow the market we cover institutional investors at my firm, and 80% of the assets, right? 80%. are held by institutions okay so there's not going to be overthrowing of the system and everything's going to go to you know what in a handbasket. let's be honest about what this means. if you can have people participate in the markets, however that may be, whether it's day trading, whether they decide to be long-term investors, buy and hold, or whether they're traders, which we appreciate on this network and in this marketplace, they have the ability to participate in a level playing field and i think or at least i hope that's what our legislative individuals and representatives will work to achieve on behalf of this country. they may not get anywhere with it, but ultimately it does sound

like folks are willing to kind of work across the aisle to think of a better way to provide regulations in our markets >> dan >> yeah. the congressman mentioned being productive investment, that sort of thing i think leon cooperman said it very well on the scott wapner show at noon today, is that gamestop was not a productive company. their earnings and sales were declining. it was a bricks and mortar business that really didn't need to exist anymore and the capitalist free market system was actually working. so the situation we have right now, make no mistake about it. gamestop traded 500 today and it closed today at what, 193. who do you think got hurt here today in this game and i just don't appreciate having all these billionaire influencers, you know, come on air, come on twitter and kind of egging these guys on and thinking that they have their backs. they're not going to be buying this stock the whole way down from them when they're searching for a bid as it's crashing 10%

at a clip. so i just think there's a lot of goofiness going on right here. and i'm telling you, i'm telling you, i'm telling you, it's going to be the little guy who gets screwed in the end it's just that simple. it happens that way every single time i don't know why it's going to be different this time and this is a little bubble. it's a little part of the market here but it seems to be like moth to a flame for these retail investors, these robinhood people, these reddit people, who want to play here. it's not going to work out well for them they might have taken out some fancy billionaire hedge fund guys but let me tell you something. they're lining up to get in their places one way or another. and you can't regulate that as far as the free market is concerned. but you can regulate collusion you can encourage these companies that are very well funded to educate their users and understand what they're doing. >> all right coming up, we're getting closer to the big interview that you do not want to miss the ceo of robinhood will join us in moments. stay with us

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for your free information kit i'm proud to be a part of aag. i trust 'em. i think you can too. call now! welcome back to this special report the reddit rebellion this week has been a testament to the internet's influence over the market gary vandar chuck, the ceo of vander media, joins us now gary, you were an early investor in what some may have seen as fads, the crypto currenciy platform coin base, ridesharing giant uber what's your take on what's going on and the staying power of what is going on? >> it's capitalism it's business. you know, people love free markets and limited regulation until it affects them. and so i think the internet is going to pick on you it's just the way it is. first it was bookstores in the late '90s. people that had medallions

locked up in new york city, thought they were fine, they got addressed. the internet is the infrastructure of society. and humans that are on top of it and platforms that get people together to communicate, this is just the reality of the situation. so the staying power this is just the beginning i mean, everyone's talking about regulating robinhood or regulating this. unless we're looking at going the track of china and russia and actually regulating our entire internet, you can't stop humans communicating to each other. >> so this is really just an extension of how technology has empowered people in other ways they may have empowered people to, you know, transport people in different ways, to communicate in different ways and here to trade in different ways is that your take? >> 100%. everyone's baffled all the time. they're baffled that a president can go direct to consumer and not do briefings

they're baffled that taxis have been -- like everyone's always baffled. when is everybody who's watching this show going to understand that this thing called the internet came along and changed society? this is printing press 100 x we are in the early stages and people are struggling with calibrating the massive impact of this. >> hey, gary quick question so you mentioned obviously amazon disrupted bricks and mortar retail. and we can -- there's 100 examples over the last 25 years. what exactly would you say that robinhood has disrupted other than the pricing of trading services because to me i think what it's done is made a very easy on-ramp. it's a product created by the very people that created the most addictive products we have on our iphones, right? facebook, google, electronic arts, that sort of thing so what are they disrupting? what are they making better for the people i guess is the --

>> lack of friction. >> -- question for the silicon valley backers >> lack of friction for, you know, very easy to understand how to get on. they like the price. this has been done over and over it's what walmart did to retail or amazon. the cost was low and the friction was low and the product was simple they disrupted, right brand, right time you've got an entire generation of under 30-year-olds that are completely passionate around entrepreneurship and business. you know, i'm 45 i was a terrible student i went to mount college, 301 entrepreneurship wasn't a thing. now every kid 15 to 25 wants to be an entrepreneur, an investor. right? people are -- like they have pride in their ability it's opening up people into the game and they want to do their thing. it's just a timing product issue. >> gary, thank you for your time good to see you. >> thank you >> gary vaynerchuk

vaynermedia. kourtney, if that's the case this is not going to go away easily just as we saw the internet change industries in ways in which you can't go back, it doesn't sound like this -- you can't put the horse back in the barn at this point, can you? >> absolutely not. i think -- i do agree with some of the folks when they're talking about financial literacy and education around things. it's educational in traditional ways so one might say that that might not be what we need to teach but i do believe that access to the markets and a leveling of the playing field is the right thing to do. right? and i said this before no one ever says to someone who spent their entire paycheck at macy's that oh, you know what? we shouldn't have let them do that, i should keep their paycheck and spend it for them right? and i don't mean to kind of minimize this. but i think it's real. people can spend their money in a lot of different ways. why it is that this way is

ruffling so many feathers i'm not quite sure what i can say is that education, being a part of understanding how money moves and being a part of the financial system is something every american has the right to do and should have the right to do >> all right we're just seconds away from the can't miss interview the robinhood ceo will join us on the other side ts icofhiquk break. do not go anywhere

hi, i'm a new customer and i want your best new smartphone deal. well i'm an existing customer and i'd like your best new smartphone deal. oh do ya? actually it's for both new and existing customers. i feel silly. but i do want the fastest 5g network. oh i want the fastest 5g network. are we actually doing this again? it's not complicated. only at&t gives everyone the same great deal. like the samsung galaxy s21 5g for free when you trade in.

welcome back to the cnbc special report let's -- we are awaiting the

robinhood ceo. this is the must-see interview of the evening there are a lot of angry people out there with the trading restrictions on a number of those highly shorted stocks that saw just roller coaster rides in the past few days. let's go straight to cnbc's andrew ross sorkin, who has the robinhood ceo right now. andrew >> melissa, thank you so very, very much. i want to bring in the ceo of robinhood, vlad tenev is with us right now. and we appreciate you joining us on a day where there are so many questions. and as melissa just said, there are frankly as you know a lot of angry customers out there and a lot of questions about what took place and the decisions that you made to limit so many of your customers' ability to buy stocks like gamestop. questions about whether you have a liquidity problem, whether you're trying to protect them from themselves, whether citadel did this explain what happened today. >> thank you for having me on the show again, andrew

so what happened today was as you pointed out, we had to make a very difficult decision. it's been a challenging day. we made the decision in the morning to limit the buying of about 13 securities on our platform so to be clear, customers could still sell those securities if they had positions in them and they could also trade in the thousands of other securities on our platform so it was a difficult decision and that's what we had to do as part of normal operations. >> but explain then why did you do this? did the s.e.c. call you and tell you you had to do this was there a problem inside the company in terms of liquidity, in terms of the amount of deposits that you had to put in front to the exchanges what led to this >> sure. and let me explain exactly how

this works first of all, i want to address some of the misinformation that's been out there because there's a lot of it. we absolutely did not do this at the direction of any market maker or hedge fund or anyone we route to or other market participants the reason we did it was because robinhood is a brokerage firm. we have lots of financial requirements, including s.e.c. net capital requirements and clearinghouse deposits so that's money that we have to deposit at various clearinghouses so some of these requirements fluctuate quite a bit based on volatility in the markets, and they can be substantial in the current environment where there's a lot of volatility and a lot of concentrated activity in these names that have been going viral on social media. so we're really in unprecedented times. and in order to protect the firm

and protect our customers we had to limit buying in these stocks. and to be absolutely clear again it wasn't -- >> it sounds -- >> go ahead. >> but it sounds to me, though, that you're suggesting that there was a liquidity problem inside the firm. and my question about that, then, raises all sorts of new questions about whether there's a systemic issue underneath the system and underneath the company unto itself. >> there was no liquidity problem. and to be clear, this was done pre-emptively. so we did this proactively and thousands of other securities remain tradable on the platform customers that held these positions were able to sell them and we're doing what we can to allow buying and to remove these restrictions in the morning. but also you might have seen robinhood has been the number one app in the app store overall. so we have seen unprecedented

interest due to the fact that finance has been culturally relevant in a way that it hasn't been before and these stocks are going viral on social media. and i think it's really interesting to juxtapose against some of the other questions that we've been having before this. of course robinhood stands for everyday investors from the very beginning we have stood for investors, opening up access and giving them the ability to trade commission-free in whatever they want. and we've gotten a lot of criticism that maybe there should be more restrictions. so it pains us to have had to impose these restrictions and we're going to do what we can to enable trading in stocks -- >> but what do you tell -- but what do you tell the robinhood investor who says look at the screen, i'm losing money, you are not allowing me to buy this? and by the way, i'm going to

have to sell it for less money because of what you did. >> well, to be clear, we're not allowing people to buy it, but they can sell positions that they have. and i feel a little bit -- i know how clorox and lysol felt in the pandemic when they were running out of hand sanitizer and supplies we just haven't seen this level of concentrated interest marketwide in a small number of names before so we're doing -- we understand our customers are upset. we're doing what we can to re-enable buying in these names and we stand with our customers. we stand for the everyday investor and we do believe that you should be able to buy and sell the stocks that you want to subject to all requirements. and that's what we're going to -- that's what we're working day in and day out to make possible >> what do you say to the

customer who says look, maybe i shouldn't be on robinhood anymore? if they're going to not -- if they're going to shut me out right when i need to be on the service, maybe i should go to an alternative service. >> look, we realize customers are upset with this. it was not an easy decision. ultimately, the team made the correct decision here. so what we can do is move forward, focus on giving customers the most stable and reliable platform going forward. and we've invested a lot in that and we've actually seen some great progress and taking all the steps we can to make sure customers can buy the securities that they want to buy without restrictions in the future >> when you look at the trading in these stocks over the past several days, do you think they're divorced from reality? are you concerned that the investors that are involved in

this are doing these things for reasons that they fully understand and they fully understand the risks involved? >> look, i'm obviously a big believer in more education i want to make sure we give customers all the tools and educational resources that we can possibly give them this is really about access. and access is something i've been super strong about from the very beginning in the face of a lot of criticism and questions about whether we should be granting people access in the first place. so yes, i think people need to be informed, they need to be educated we do want to give them the ability to do that but i also believe that access is a very powerful thing the more individual investors have access to the markets the better off we will be. and we're going to work tirelessly day in and day out to make sure customers have that access it's in the name it's everything we stand for >> vlad, can you walk us -- >> let me bring melissa in

>> andrew, thank you and vlad, thanks for being on cnbc can you walk us through the moment in which you realized that you needed to do this in order to have the capital? you drew on credit lines we've confirmed that and you can confirm that to us directly at what point did you say the options volume is just crazy, the stock volume is crazy, and we need to do this it sounds like something you should have been able to figure out prior to today >> well, this is -- it's interesting because i don't remember a time in the past where social media and the financial system have intersected in such a direct way. so things can go viral on social media and that can lead to viralty in the financial markets. like i mentioned before robinhood's been number one on the app store for several days and we've never been number one on the app store before. so i don't think anyone could have anticipated that this would

happen and in terms of the credit lines you mentioned, that was really a proactive measure. as i mentioned earlier in the conversation, the deposit requirements that we have at the various clearinghouses govern how much we can allow customers to buy some of these stocks. so obviously, in line with our mission and what we want to do, we want to put ourselves in a position to allow our customers to be as unrestricted as possible in accordance with the requirements and the regulations. so we pulled those credit lines so that we could maximize within reason the funds we have to deposit at the clearinghouses. >> final question. and we only really have 30 seconds at this point. and we will continue this conversation on "squawk box" tomorrow but the question i would ask you is you said you're going to start allowing buying tomorrow what happens if it triggers

whatever system triggered today where you had to stop it are you anticipating that? are you doing anything ahead of that prospect? >> yeah, we're doing a lot of things we want to obviously allow buying safely for the firm and for the customers. and the teams have been working very, very hard. they were already working very hard dealing with the unprec unprecedented, you know, volumes and the equity volumes and the unique situation we've been in so we want to do that safely we want to clear in the communications and i own that, you know, we should have been out there a little bit soon er the team's been working very hard and people are doing what they can for our customers and i'm very proud of the work that the team is doing and has done >> vlad, we appreciate you joining us we will continue this conversation, and we will air more of it tomorrow morning on

"squawk box. but again, we thank you. >> i appreciate you having me. thank you again. >> of course >> it's great to hear from vlad. andrew, thank you so much for bringing us that interview thank you court ni gibson, dan nathan for joining us tonight for this special edition of "fast money. the reddit rebellion the news with shepard smith starts right now. shepard smith starts right now now it's not a game. now it's risen to congress and investigations game stop just the start i'm shepard smith. this is the news on cnbc >> this force is probably bigger than establishment elites think it is. >> the warning from washington the gamestop surge may be just the beginning. and life on wall street and your street may never be the same as a new generation tries to change the rules of the game. covid cases dropping sharply, but now a new, more