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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

#181

Post by ummonk »

cma wrote: post #117
bluquark wrote: post #85

Earlier quoted context omitted.

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.

Yeah we'd be looking at losses much bigger than that if the short-sellers go under due to a squeeze.

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

#182

Post by matkoniecz »

bsanr2 wrote: post #151
onion2k wrote: post #140

Earlier quoted context omitted.

Santander were fined £32m for failing to deal with 40,000 accounts when people died. ( https://www.fca.org.uk/news/press-releases/santander-uk-plc-... ). They were also fined £58m for failures around consumer credit ( https://www.ftadviser.com/investments/2019/02/27/santander-h... ). In the US Santander paid out $550m because of dodgy car loans ( https://www.reuters.com/article/us-usa-autos-lending/santand... ). That…

They were also caught discriminating against... well, you can probably finish this sentence. https://www.reuters.com/article/us-santanderbank-mortgages-i...

> It also refused loans to 30 percent of low-income applicants, compared to the aggregate rate of 18 percent

Why refusing to loan money to low-income borrowers is supposed to be discrimination?

If someone has minimal income they are far less likely to repay loan, why this is supposed to be indicator of some discrimination?

If someone earn 30k per year and someone earns 3000k per year then it is not surprising that loan of 200k would be far more likely given to person with higher income.

Banks are typically extremely awful, but why that specific part is supposed be indicator of something wrong? And it seems likely that other statistics mentioned are result of that.

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

#183

Post by pishpash »

Xxplosive wrote: post #118

I 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…

Did their customers all buy on margin?

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

#184

Post by onethought »

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…

This reads like an ad, and Monzo is super popular in the UK, like it would be the obvious recommendation for anyone looking to bank in the UK with a smartphone...

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

#185

Post by sm4rk0 »

dustinmoris wrote: post #153
celticninja wrote: post #119

Earlier quoted context omitted.

Starling Starlink is the space internet from Musk

Auto correct what can I do. Of course I meant Starling, they were the first challenger bank to offer business accounts as well and I’m very happy so far.

Not ranting, but as you asked "what can I do" here are few ideas:

Couldn't you turn off autocomplete or check what you/it wrote before you hit "reply" button?

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

#186

Post by onethought »

Closi wrote: post #74
amscanne wrote: post #54

Earlier quoted context omitted.

Retail investors lost millions because of an inability to buy?

An inability to buy means an inability to squeeze the short harder, and depending on how hard you have squeezed that can affect the overall success of the squeeze. Also they apparently forced sale on some accounts, which combined with an inability to buy more, definitely affected stock prices.

But you won’t lose. Right?

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

#187

Post by [deleted] »

loycombinate wrote: post #138

So, every broker is on margin with DDTC, they don’t have to have 100pct cash for the dollar amount of the buy orders they send to DDTC, as long as they will have the cash in 2 day. Some brokers like fidelity have hoards of 401k money and more likely to have 100pct cash for their orders. Trading brokers like IBKR RH keeps the minimum possible amount of cash with DDTC, and their automated systems adjusted up the minimu…

[deleted]

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

#188

Post by pishpash »

loycombinate wrote: post #138

So, every broker is on margin with DDTC, they don’t have to have 100pct cash for the dollar amount of the buy orders they send to DDTC, as long as they will have the cash in 2 day. Some brokers like fidelity have hoards of 401k money and more likely to have 100pct cash for their orders. Trading brokers like IBKR RH keeps the minimum possible amount of cash with DDTC, and their automated systems adjusted up the minimu…

Doesn't regular Robinhood require settled cash to trade?

Edit: Nope, looks like Robinhood "Instant" is now the default, margin account, but still limited to $1000 per account:

https://robinhood.com/us/en/support/articles/robinhood-accou...

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

#189

Post by viktorcode »

dmichulke wrote: post #43

Not sure I understand: High volume causes sudden operating expenses up to a billion? Like, they're launching more EC2 instances? Or is that because they suffer from slippage? And if so, why don't they adjust the spreads? And if it's slippage, why would they still allow selling but not buying? Color me skeptic, but this makes no sense. For now I believe they just come up with some story to mask their obvious, IMO crim…

Bloomberg explains the reason being the transactions clearance premium, which was increased due to the stocks volatility.

https://www.bloomberg.com/news/articles/2021-01-29/for-robin...

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

#190

Post by nmca »

onethought wrote: post #184
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…

This reads like an ad, and Monzo is super popular in the UK, like it would be the obvious recommendation for anyone looking to bank in the UK with a smartphone...

Eh, I doubt it's an ad - I left hsbc many of the same reasons. Final straw was trying to get my data from them, which they are obligated to provide in some sensible format and simply wouldn't. Indeed after a couple if escalations they were insisting that all data internally was only kept on pdf beyond a six month horizon, which was blatantly wrong for a whole cavalcade of reasons. Unethical in the large and useless at a retail level, never want anything to do with them.
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