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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

#161

Post by beagle3 »

sidibe wrote: post #76
amscanne wrote: post #54

Earlier quoted context omitted.

Retail investors lost millions because of an inability to buy?

The people who probably would have lost their money anyways (because they were waiting for more suckers to push the price higher) now have an excuse (other retail buyers couldn't open new positions). People who realized those were the suckers stomached selling while it wasn't as high as yesterday but still astronomical. The anger at Robinhood reminds me of when the government in Nigeria cracked down on MMM ponzi sche…

Except, as SI/Float was at 139%, there was a guaranteed sucker to buy it off them at basically any price - unlike in a Ponzi scheme where you never know if there’s going to be another sucker.

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

#162

Post by AmericanChopper »

Clewza313 wrote: post #127
AmericanChopper wrote: post #116

Earlier quoted context omitted.

> 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.

There's day trading, and then there's taking out credit card cash advances to buy leveraged call options on a stock that's already gone up 1000% in a month. Both are risky, but the day traders I've known wouldn't touch the latter with a barge pole.

Would the day traders you know be happy using a brokerage who’s liquidity issue mean it’s had to ban trading certain securities? Even if they don’t want to YOLO like a maniac, why would you trust a company that’s had so many very public blunders with your money? It’s not like there aren’t more reputable zero-fee brokerages out there.

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

#163

Post by jusssi »

michaelscott wrote: post #121
Clewza313 wrote: post #67

Earlier quoted context omitted.

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).

I'm not sure about this. If there's clear and blatant market manipulation on the part of the broker (which will likely get them hauled in before the SEC btw) then I imagine many investors/traders looking at this from the sidelines will be pulling their accounts as well, whether they're involved in this directly or not.

> likely get them hauled in before the SEC

More or less likely than enabling or collaborating with the crowd to massively pump a stock for the sole purpose of disturbing the market?

This, to me, looks like their stay-out-of-jail card.

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

#164

Post by dagw »

cma wrote: post #123
dagw wrote: post #108

Earlier quoted context omitted.

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…

It covers less than $500K if SIPC itself fails (after $5 billion in payouts it is insolvent).

True, it is still an open question if the government would step in in that case or not. As it stands they have no obligation to do so.

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

#165

Post by marton78 »

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…

I read once that in Islam taking interest on loans is forbidden, therefore Islamic banking operates based on some kinds of cooperatives. Is switching to an Islamic bank maybe an option?

For those in Germany I recommend GLS bank. They have an ethical charter on whom they invest in and their loans are fully backed.

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

#166

Post by b1476 »

mrmrcoleman wrote: post #149
collyw wrote: post #130

Earlier quoted context omitted.

Monzo appear to be more interested in showing of their hipster tech stack than anything else.

I've been using Monzo for 2 years and I have no complaints. The app is fantastic and they have integrations for international transfers, and business banking that just work.

I’ve been using Monzo for around the same time and have had nothing but good things to say right up until they decided to start pushing their Premium/Plus accounts onto customers via in app ads. With all the rumours of them struggling to become profitable it’s made me consider a move to Starling, who seem to be in a better position in that regard.

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

#167

Post by 29athrowaway »

To understand why this is happening, you need to understand the person that started it all: u/deepfuckingvalue

https://www.reddit.com/user/deepfuckingvalue

He posted updates regularly of his positions. Scroll all the way down and see how much money he made over time.

As he started becoming more successful, more and more people wanted to replicate his success, eventually creating the movement that you hear about today.

He takes pride on holding no matter what.

Spoiler alert: he went from ~100k to 33m USD.

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

#168

Post by nvarsj »

collyw wrote: post #130
onion2k wrote: post #96

Earlier 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…

Monzo appear to be more interested in showing of their hipster tech stack than anything else.

What a strange comment. Their "hipster stack" works really, really well. It's the best banking UX available by far, and I've moved all my primary banking to it.

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

#169

Post by pishpash »

neximo64 wrote: post #124
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.

Your bank actually has to lie to you to remain solvent. All banks do. The Central Bank also encourage it. Last year you saw both that banks were 'forced' to withhold dividends and they were perfectly capitalised. Both cant be true of course. If they hide it from you your money and everyones money is safe. If they tell the truth everyone loses, so it is actually the best outcome for you and everyone else. The fraction…

That's why there should be no banks, only money market funds. Every deposit is an investment decision. You may as well reap the rewards if you take all the risks of lending and cut out the middleman.

I've been using a brokerage account for banking for years.

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

#170

Post by TeMPOraL »

marton78 wrote: post #165
onion2k wrote: post #96

Earlier 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…

I read once that in Islam taking interest on loans is forbidden, therefore Islamic banking operates based on some kinds of cooperatives. Is switching to an Islamic bank maybe an option? For those in Germany I recommend GLS bank. They have an ethical charter on whom they invest in and their loans are fully backed.

Can't find the source now, but I read that while Islam (and Judaism, at least in the past) forbids usury and this sort of extends to low interest too, the concept of interest is useful enough (or at least in demand) that people developed all kinds of practices that work almost exactly as interest.
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