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Robinhood, in Need of Cash, Raises $1B from Its Investors

nytimes.com

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Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#101

Post by nullc »

throwaway23819 wrote: post #95
peytn wrote: post #37

Earlier quoted context omitted.

I’m not keeping my money with a financial institution that lies to me. End of story. Transfer initiated on my cash, and I’ll deal with moving stocks in the morning.

This is why I prefer my money be with IBKR. I already know when it comes to volatility, they are going to choose IBKR over my account which is good because usually "my account" is fine but its the others who are doing really crazy things. I know IBKR will be around in the morning. That's why I love them.

IBKR's highly visible and active risk management-- e.g. their proactive increase in margin requirements in advance of recent political events-- is a major positive point in their favour.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#102

Post by marvin »

ArtTimeInvestor wrote: post #86
gryz wrote: post #58

Earlier quoted context omitted.

Do users actually lose the stocks, if something that happens to the Robinhood itself? I live under assumption that it is not happening. In any case stocks should stay belonging to the folks who purchased them.

If the stocks are still there, then you are entitled to get them. Unfortunately, there is no way to check if the stocks are really there. RH showed you some pixels on the screen saying they hold stocks for you. If RH maliciously or by mistake lost them or never bought them, then there is no third party that will make you whole.

Failure to deliver on borrowed/shorted stocks would be a conpletely plausible scenario during a short squeeze.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#103

Post by codesternews »

amscanne wrote: post #54
sdan wrote: post #17

Earlier quoted context omitted.

And right after saying they don't have any liquidity problems said, "We're #1 on the app" while retail investors were losing millions because of expiring options/stocks. Absolutely tone-deaf. Not denying that all securities have risks, but that was a bad response imo.

Retail investors lost millions because of an inability to buy?

Yes, they are forced to sell and other robinhood users could not buy. It means they allowed selling and restricted buying that will eventually make stock goes down because no other person even if they want to can't buy.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#104

Post by ajhurliman »

blueblisters wrote: post #93
ArtTimeInvestor wrote: post #82

Earlier quoted context omitted.

Your holdings in cash or your holdings in shares?

Both. I suspect there is some kind of FDIC-like insurance but not sure of the specifics.

Yes, it's called SIPC, you're fine unless you have over $500,000 in robinhood.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#105

Post by boc »

throwawaysea wrote: post #79
julienreszka wrote: post #29

Earlier quoted context omitted.

>Speculation is healthy I've never seen somebody say speculation is healthy but rather the opposite. Care to elaborate?

What I meant was that speculation and challenging the existing narrative plays a role in seeking the truth. So it has value and can be healthy. But it has to be treated for what it is - speculation. In this case, the actions of brokers should be investigated, and regulatory requirements should be scrutinized. But taking speculation as a foregone conclusion and resorting to an extreme reaction as such, is not healthy.

It's not an extreme reaction to see a company like Robinhood bending to the will of its real customers, aka Citadel, and concluding that they were both running out of liquid money because they allow instant trading for new users AND that they protected their customers from getting wiped out by limiting the ability of retail investors to buy GME.

Billions of dollars were on the line.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#106

Post by dataflow »

gryz wrote: post #58
peytn wrote: post #37

Earlier quoted context omitted.

I’m not keeping my money with a financial institution that lies to me. End of story. Transfer initiated on my cash, and I’ll deal with moving stocks in the morning.

Do users actually lose the stocks, if something that happens to the Robinhood itself? I live under assumption that it is not happening. In any case stocks should stay belonging to the folks who purchased them.

I hear your stocks can get lent out for shorting by others, which means you might not actually have them even while Robinhood is alive when you think you do...

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#107

Post by dustinmoris »

onion2k wrote: post #96
peytn wrote: post #37

Earlier quoted context omitted.

I’m not keeping my money with a financial institution that lies to me. End of story. Transfer initiated on my cash, and I’ll deal with moving stocks in the morning.

I’m not keeping my money with a financial institution that lies to me. I know for a fact my bank lies. They've been fined hundreds of millions of dollars for money laundering (it's HSBC). A few years ago I looked in to moving to a more honest bank, but I couldn't find one that also met basic criteria like having access to cash points in the UK and having a half decent mobile banking app. Literally every major bank th…

Starling or Monzo?

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#108

Post by dagw »

blueblisters wrote: post #77
ajsharp wrote: post #24

"To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation." Non-zero chance had they not haulted trading on those symbols they would've been insolvent by close of trading today, depending on the size of the…

Are brokerage deposits / holdings protected by insurance? I'm genuinely fearful of losing my holdings in Robinhood at this point.

Yes, it's called SIPC and is (kind of) equivalent to the FDIC for banks. However it only covers up to $500k, only covers cash, stocks, bonds, CDs, and (I think) mutual funds. It does not cover options or future contracts.

Also it will only attempt to return the securities you 'lost' not their cash value. If you lose a lot of money due to not being able to sell your stocks for several days, that is not covered. So if you held 2000 stocks of GME, the SIPC will (eventually) give you back 2000 stocks of GME, not the cash value of those stocks when Robinhood went bankrupt.

Re: Robinhood, in Need of Cash, Raises $1B from Its Investors

#109

Post by enw »

virgilp wrote: post #50
jansan wrote: post #40

Earlier quoted context omitted.

The Squeezed Short Edit: If you haven't watched "The Big Short" yet, watch it! Tonight!

WSB proposed "the retarded short" (they affectionately call themselves retards)

Honestly I’m so happy there’s a “mainstream” place on the Internet where people use the terms retarded and autistic affectionately. It feels like a breath of fresh air next to the language police of everywhere else.
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