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Robinhood Eases GameStop Restrictions as CEO Explains the App’s Heavily-Criticized Buying Ban

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  • Robinhood co-CEO Vlad Tenev said the company “had no choice” in its controversial decision to suspend buying but still allow the selling of stocks like GameStop.
  • The situation began last week when a group of Redditors largely drove an unprecedented spike in GameStop’s stock price in an attempt to cause major hedge funds like Melvin Capital to lose billions. 
  • Tenev said Robinhood made the decision to restrict selling because the exponential surge in stock prices resulted in a $3 billion deposit bill from the National Securities Clearing Corporation. Meanwhile, Robinhood had only $2 billion in venture capital. 
  • “We want to give people the access, so that’s been very, very challenging,” Tenev said Sunday night, “but we… had to conform to our regulatory capital requirements.”
  • Tenev added that Robinhood still allowed shares of GameStop to be sold because “people get really pissed off if they’re holding stock and they want to sell it and they can’t, so I think that’s categorically worse.” 

Robinhood CEO Explains GME Buying Ban

Since the end of last week, Robinhood co-CEO Vlad Tenev has appeared in numerous interviews in an attempt to explain and justify why his company chose to restrict users from buying new shares of stocks for GameStop, AMC, and more.

“We want to give people the access, so that’s been very, very challenging,” Tenev told Tesla CEO Elon Musk in an exchange on the audio app Clubhouse Sunday night, “but we had no choice in this case. We had to conform to our regulatory capital requirements.” 

Part of the reason Robinhood’s decision has been so heavily criticized is because the company still allowed users to sell off their existing shares of those stocks. In essence, that appeared to favor large hedge funds over everyday investors. 

“We got a lot of questions about, ‘Okay, you had to restrict buying; why didn’t you also restrict selling?’” Tenev told Musk. “And the fact of the matter is people get really pissed off if they’re holding stock and they want to sell it and they can’t, right? So I think that’s categorically worse.”  

While other brokerages also restricted stocks amid an unprecedented surge largely driven by a group of Redditors from the subreddit WallStreetBets, Robinhood’s decision was particularly singled out because many viewed it as abandoning the company’s mission of “democratiz[ing] finance for all.”

In addition to that, many have accused Robinhood of bowing to pressure from hedge funds that it has a relationship with — including Citadel Capital, which helped pump $2.75 billion into the hedge fund Melvin Capital last week after it lost billions from its position in GameStop. 

Tenev has now denied this claim multiple times, but nonetheless, criticism has continued. 

“Robinhood is supposed to be steal from the rich give to the poor — that’s the story of Robinhood,” podcast host Joe Rogan said on his show over the weekend. “Instead, they are protecting all these hedge fund people and stopping people from doing this.”

For his part, Tenev said the decision was made because the surge in stocks like GameStop resulted in a massive deposit bill from the National Securities Clearing Corporation. While the process is fairly complex, brokerages like Robinhood must make initial deposits to clearinghouses when investors buy stocks. 

That deposit, according to Tenev, spiked to $3 billion in the midst of GameStop’s volatility, creating a sizable problem for Robinhood since it had only raised $2 billion in venture capital. 

“That essentially explains why we had to mark these symbols position-closing only, and also why we knew this was a bad outcome for customers,” Tenev said. “You know, part of what’s been really difficult is Robinhood stands for democratizing access for stocks.”

In his exchange with Musk, Tenev said Robinhood eventually managed to negotiate that requirement down to $700 million.

Robinhood Eases Trading Limits

Monday morning, Robinhood increased the number of new GameStop shares that users can buy from one to four.

Previously on Friday, Robinhood announced that it would back off from its “no-buy, only-sell” policy and would allow limited trading of GameStop; however, that meant users were restricted to only one new share each. 

Robinhood also included 49 other companies on that list — including American Airlines, AMC, and even Starbucks. Sunday, Robinhood backtracked by reducing that list to eight stocks — with AMC and GameStop still among the affected.

While users were restricted from buying more than one new share of GameStop at the time, they could now buy up to 10 new shares of AMC.

See what others are saying: (CNN) (CNBC) (Business Insider)

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6 Dr. Seuss Books Won’t Be Published Anymore Because of Racist Imagery

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  • Six Dr. Seuss books will no longer be published because they “portray people in ways that are hurtful and wrong,” Dr. Seuss Enterprises announced Tuesday.
  • The late author’s company said the decision was made last year after months of feedback from audiences, teachers, and other specialists in the academic field. 
  • However, many school districts and groups have moved away from Dr. Seuss for years because of racist stereotypes and insensitive imagery in some of his work.

Production of Six Offensive Books To End

Six Dr. Seuss books will stop being published because of racist and insensitive imagery, the business that preserves and protects the author’s legacy said Tuesday.

The list of books blocked from production are:

  • “And to Think That I Saw It on Mulberry Street”
  • “If I Ran the Zoo”
  • “McElligot’s Pool”
  • “On Beyond Zebra!”
  • “Scrambled Eggs Super!”
  • “The Cat’s Quizzer”

“These books portray people in ways that are hurtful and wrong,” Dr. Seuss Enterprises wrote in its announcement letter. “Ceasing sales of these books is only part of our commitment and our broader plan to ensure Dr. Seuss Enterprises’s catalog represents and supports all communities and families.”

Examples of Offending Content

A 2019 study published in the journal “Research on Diversity in Youth Literature,” looked at 50 books by Dr. Seuss and found 43 out of the 45 characters of color have “characteristics aligning with the definition of Orientalism,” or the stereotypical, offensive portrayal of Asia. It added that the two “African” characters both have anti-Black characteristics.

The study even pointed to specific examples. “In (“The Cat’s Quizzer”), the Japanese character is referred to as ‘a Japanese,’ has a bright yellow face, and is standing on what appears to be Mt. Fuji,” the authors wrote.

It also pointed to “If I Ran the Zoo” as an example of Orientalism and White supremacy.

“The three (and only three) Asian characters who are not wearing conical hats are carrying a White male on their heads in ‘If I Ran the Zoo.’ The White male is not only on top of, and being carried by, these Asian characters, but he is also holding a gun, illustrating dominance,” the study authors wrote. “The text beneath the Asian characters describes them as ‘helpers who all wear their eyes at a slant’ from ‘countries no one can spell.'”

The study also argues that since the majority of human characters in Dr. Seuss’ books are White, his works center Whiteness and thus perpetuate White supremacy.

Academic Groups Move Away From Seuss

The company told the Associated Press that the decision was made last year after months of feedback from audiences, teachers, and other specialists in the academic field.

Still, it’s worth noting that it also comes a week after a school district in Virginia made headlines for allegedly banning books written by Dr. Seuss, whose real name is Theodor Seuss Geisel.

The district eventually clarified that it was not banning his books. Instead, it said it was discouraging the connection between Dr. Seuss and “Read Across America Day,” which falls on the author’s birthday: March 2.

The decision to move away from Dr. Seuss books is not actually an uncommon move. School districts across the country have been doing the same.

The National Education Association, which founded “Read Across America Day” and deliberately aligned it with Dr. Seuss’ birthday, is included in that shift.

According to AP News, it’s been deemphasizing Seuss for years now and encouraging a more diverse reading list for kids.

While many have applauded Dr. Seuss Enterprises’ decision, others noted that it will continue to publish more popular books that have received criticism, including “The Cat in the Hat.”

For now, the company said it’s “committed to listening and learning and will continue to review our entire portfolio.”

See what others are saying: (CNN) (Deadline) (AP News)

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Nike Exec Resigns After Bloomberg Reveals Her Connection To Son’s Sneaker Resale Business

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  • Nike Executive Ann Hebert has voluntarily resigned from the company after it was revealed that her son used her credit card to purchase more than $100,000 worth of new shoes for his shoe-resell business.
  • The connection was first noticed by Bloomberg reporter Joshua Hunt, who was working on a profile of Hebert’s son, Joe. 
  • According to a Nike spokesperson, Hebert disclosed the relevant information about her son’s business to the company and hadn’t violated company policy. 
  • Still, Hunt’s report led to swift condemnation for Hebert, with many believing she had used her position to help her son scalp shoes. 

Nike Exec Resigns 

Nike Executive Ann Hebert voluntarily resigned Monday after Bloomberg exposed her connection to her son’s sneaker flipping business last week.

The report, published on Feb. 25, follows 19-year-old Joe Hebert and details how he spent more than $100,000 buying new shoes to resell at his business, West Coast Streetwear. In the article, reporter Joshua Hunt noted that types of shoes Joe bought would sell out in hours and that for people like him, “The sneaker market… is a lot like playing the [stock] market.”

“In the hours after siphoning up stock from retailers, they essentially sell short-term futures based on street sentiment,” Hunt said. 

While scalping is a controversial enough practice on its own, near the end of the article, Hunt notes an unusual connection.

“At one point in late June… [Joe] phoned me, and the number was identified as belonging to Ann Hebert,” Hunt said. “I looked the name up and discovered there was an Ann Hebert who’d worked at Nike for 25 years and had recently been made its vice president and general manager for North America.”

Notably, the April 2020 press release announcing Ann’s new position stated she would be “instrumental in accelerating our consumer direct offense in North America.” That initiative redirected sales from retailers directly to consumers, and as a result, it helped to fuel the resale market. 

“[Joe] Hebert later sent me a statement for an American Express corporate card for [West Coast Streetwear]… and it was in Ann’s name,” Hunt said in his article.

Hunt said he later asked Joe about the connection and while Joe admitted that Ann was his mother, he said she was too high up at Nike to be involved in what he does and that he’d never received inside information, such as discount codes, from her. He then insisted that she not be mentioned in the article and cut off contact.

From there, Hunt reached out to Ann and Nike directly. While Ann didn’t respond, a spokesperson told Hunt that Ann hadn’t violated company policy and that she had disclosed the relevant information about her son’s business to Nike. 

Online Reaction

Ann’s resignation comes amid outrage online, but the reaction to her resignation itself has been mixed. 

There’s been no shortage of criticism against Ann following the announcement of her step down, and she’s even become the butt of a number of jokes. Still, others have defended her. 

“The worst part is that Ann Hebert worked her way up the ladder in a male-dominated industry for 25 years only to be knocked down by her clout-chasing son,” TV host Tamara Dhia tweeted.

Others have said that with everything publicly known so far, they still feel like Ann was in the wrong.

See what others are saying: (Complex) (CNBC) (New York Post)

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Doctors Urge People Not Skip Johnson & Johnson’s COVID-19 Vaccine for Moderna or Pfizer’s

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  • The FDA and CDC approved Johnson & Johnson’s COVID-19 vaccine over the weekend, allowing the company to begin shipping doses Monday for use later this week.
  • Unlike Pfizer and Moderna’s vaccines, Johnson & Johnson’s can be stored at higher temperatures for longer and only requires a single shot. 
  • Still, experts are worried people may try to skip the vaccine for either Pfizer or Moderna’s version since they have higher efficacy rates.
  • Because of this, health officials have stressed that Johnson & Johnson’s vaccine is still highly effective and necessary to keep the U.S. from seeing another rise in daily case rates.

CDC Recommends Johnson & Johnson Vaccine

The Centers for Disease Control and Prevention recommended Johnson & Johnson’s COVID-19 vaccine on Sunday for Americans 18 and older. With that, the first doses of the vaccine began shipping out Monday, and vaccinations are expected to begin sometime this week.

The CDC’s recommendation came one day after the Food and Drug Administration authorized the vaccine for emergency use.

Johnson & Johnson is expected to ship 3.9 million doses this week. By the end of March, it hopes to have shipped a total of 20 million doses.

Johnson & Johnson’s vaccine is also notable for two reasons. First, it doesn’t need to be kept frozen like the Pfizer vaccine and can be kept in a fridge for much longer than the Moderna vaccine. Second, it only needs to be administered once — not twice. 

The approval and recommendation of this vaccine come at a potentially pivotal juncture. Since mid-January, the rate of new COVID-19 infections has been steadily falling; however, for the last week, daily infection rates have begun to plateau.

While it’s undoubtedly good news that the U.S. isn’t once again seeing a rise in cases, as CDC Director Rochelle Walensky explained, this is “a very concerning shift in the trajectory.” 

That’s because it very likely could result in a rise in cases. 

For example, experts worry that the public, as well as state and local officials, may be starting to let their guards down after hearing the news of falling infection rates. Still, those experts have reminded people that Monday marks one year since the announcement of the first coronavirus death in the U.S.

Since then, the U.S. alone has logged more than half a million deaths from this virus.

Johnson & Johnson Vaccine Efficacy 

The addition of the Johnson & Johnson vaccine has the capacity to help keep infection rates from climbing once more, but that doesn’t mean there won’t be some challenges. 

In fact, a major concern now seems to be around the effectiveness of the vaccine.

Notably, in late-stage trials, it was 85% effective against severe cases of COVID-19, with no deaths or hospitalizations being reported in the month after participants received the vaccine. It was also found to be around 72% effective at preventing moderate infections. 

Still, that’s less than the 94% and 95% efficacy rates for the Moderna and Pfizer vaccines, respectively. 

Because of that discrepancy, some health officials have begun to worry that people will try to skip the Johnson & Johnson vaccine in favor of the other two. 

As a result, experts are assuring the public that Johnson & Johnson’s vaccine is still highly effective. They’ve also noted that the studies for the three different vaccines happened at different stages of the pandemic and in different environments. 

“They were compared under different circumstances,” Dr. Anthony Fauci, director of the NIAID, said. “All three of them are really quite good, and people should take the one that’s most available to them… people need to get vaccinated as quickly and as expeditiously as possible.”

See what others are saying: (The Washington Post) (Reuters) (CNN)

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