I imagine they have some function determining this, that correlates number of shares available per user, number of users, and RH’s own capital buffer.
When combined with the massive influx of users all wanting to buy the same stocks, their newly raised $1B capital buffer is getting diluted across a larger and larger pool of traders.
/r/wallstreetbets jumped from 1.7 million users to 6 million users in just a few days. Some portion of those either joined RH to buy GME, or already had a RH account and started using it to buy GME.
And GME only has 65 million shares outstanding in the first place, so max available shares per WSB trader alone is ~11.5. Factor in the broader market and it's less.
They also didn't just do it for high volatility stocks - they are doing it for "competitor" stocks as well. IPOE is limited to one share now, right after their merger with SoFi (a Robinhood competitor).
