Earlier quoted context omitted.
The Big Squeeze
Darn, that name is already taken. :( https://www.imdb.com/title/tt0115680/
The Big Short Squeeze.
Robinhood, in Need of Cash, Raises $1B from Its Investors
111–120 of 479 posts
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#112"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…
OK, how hard it is to increase your credit line in real time. We are not talking 100s of billions here. Had RH reached out to the likes of Chamath or Musk, they would have gotten a credit line in minutes.
This is no excuse for screwing retail investors. Horrible management. I mean, I am some random dude who can think of these, these are professionals running multi billion dollar enterprises, c'mon.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#113"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…
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. End of story.
So you're keeping cash under the mattress then i assume?
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#114Earlier 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.
Robinhood is a SIPC member. It rarely comes into play, but my understanding is that SIPC is there to ensure securities get back to their rightful owner in the event that something weird happens to the brokerage.
The issue is when?
If that takes several weeks or months in a highly volatile market its basically life or doing a flip.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#115Earlier quoted context omitted.
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.
With the (potentially huge) caveat that any losses you suffer due to not being able to sell your stocks in the period where you SIPC claim is being processed is not covered.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#116Earlier quoted context omitted.
I had a neutral to negative view toward this product before today. In part due to the product’s UX having to change after a customer killed themselves and cited the app in their suicide note. [1] I noticed that before but bad stuff happens, I had not heard of further issues and it was likely a series of contributing factors. That said, this bind broke the entire concept of the branding of the product. I’d never insta…
They've lost the trust of people YOLOing on meme stonks. I'm sure it's a noisy part of their userbase, but still only a part. It would be interesting to see stats on how many people use RH for long-term investments (buy and hold, DCA, etc), and how many use it as a form of gambling (day trading, leveraged options etc).
> people YOLOing on meme stonks
This is all that day trading is. Regardless of whether the traders even know what a meme subreddit is. Why would any day trader want to use a platform that’s going to do stuff like cut you out of an epic short squeeze? If a non-professional investor had sensible ideas, they wouldn’t be day trading.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#117Earlier 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.
Robinhood is a SIPC member. It rarely comes into play, but my understanding is that SIPC is there to ensure securities get back to their rightful owner in the event that something weird happens to the brokerage.
They are only covered up to $5 billion for the entire brokerage industry, it may be like 2008 and they all get turned into FDIC insured banks over night if tons of margin accounts fail.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#118I wonder if Robinhood is preparing for the possibility that its margin book gets blown up when GME inevitably crashes. Crashing price creates cascading margin calls and they can't liquidate their customers' positions fast enough and end up having to cover their losses, rendering them insolvent.
Sequoia, thinking that the fundamentals of the company are still solid long term and that they can wash their hands of this in an IPO in the near future, extends them a lifeline at absolutely brutal terms.
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#119Earlier quoted context omitted.
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?
Starling
Starlink is the space internet from Musk
Re: Robinhood, in Need of Cash, Raises $1B from Its Investors
#120Earlier quoted context omitted.
They blocked regular buys though. If you have money in your RH account, this is a big problem.
As I understand it, even for executing regular buys, the settlement houses require RH to maintain a large deposit of dollars as collateral. This collateral requirement goes up when a stock becomes heavily traded, or more volatile. Because of the insane volume & volatility of GME, RH's cushion of collateral was exhausted (And they've now replenished it, by borrowing & raising money.) The reason that sells were permitt…
My serious money is invested through Morgan Stanley. They have institutional investment services I do not qualify for, but I'm on their registered investor account, and it's usually $7 to $15 for simple trades. It's not that much more if you're actually planning on executing in volume.