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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

#261

Post by NicoJuicy »

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.

So you dislike Stripe too?

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

#262

Post by short_sells_poo »

peytn wrote: post #37
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…

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.

Hint: every broker will do this. If you think any broker (let alone retail) will let the client's risk taking threaten their existence, you are deluding yourself. It's a little bit like insurance: as long as most clients take diversified risks and don't push the system to it's limits, the system works. When a significant portion (majority?) of the clients all pile into an increasingly hairy position, the broker will step in and prevent the clients exacerbating the situation further.

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

#263

Post by feelix »

comboy wrote: post #251
onethought wrote: post #186

Earlier quoted context omitted.

But you won’t lose. Right?

Imagine buying a lottery ticket from me. I run the lottery. I print it out, look at it, oooh, you know what, I can't sell you this one. Of course you don't need to pay. Goodbye. Did you lose money?

you completely missed the point. the fact that the squeeze fails means that it fails to squeeze the shorts of the hedge fund, which is the one that will be coughing up billions to pay all the retailers. So yes, the retailers that are buying shares at higher prices will indeed lose actual real money if the short squeeze fails. And it will be due to what is likely to be market manipulation (ie screwing over its clients) by Robinhood

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

#264

Post by MrMan »

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…

Making an app and running a brokerage - who would have thought they are two different things.

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

#265

Post by kryogen1c »

prohobo wrote: post #259
kryogen1c wrote: post #254

Earlier quoted context omitted.

> these claims of "supporting the people" is fundamentally 100% bullshit. what a world where a free platform takes an action to stay solvent and in business and its a bullshit claim that theyre helping their customers. i guess they shouldve done the more helpful thing and gone bankrupt, illegally allowing trades they cant cover.

They were dismissive enough of retailers that it didn't even enter their feeble minds that they might need to be able to cover the costs of a real market manipulation, the kind that institutions do all the time without having these kinds of problems. They were always working for their hedge fund investors. They just got a hard slap to the face by the people they claimed to be working for. And honestly, I'm not very i…

> They just got a hard slap to the face by the people they claimed to be working for.

youre saying WSB making a stock so volatile that a brokerage cant afford to keep it on its books is a moral victory? what morals are you basing this on?

> And honestly, I'm not very impressed by anyone who would defend them.

we're commenting on an article about how RH had to borrow billions to stay afloat AFTER they already took action to minimize their exposure. they couldve gone under, and were probably insolvent. im not exactly doing mental gymnastics here.

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

#266

Post by michaelt »

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…

> 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 their credit line.

Perhaps you can help me understand something.

In the absence of margin trading, if I deposit $100 of cash at my brokerage, then I order my broker to buy $100 worth of Stock A, how does credit and the possibility of bankruptcy enter into the transaction at all?

After all, if I give my kid $5 and send him to the store to buy some milk, he doesn't need to find 'liquidity' or a 'credit line' or risk bankruptcy.

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

#267

Post by robotmay »

nly wrote: post #204
kmlx wrote: post #199

Earlier quoted context omitted.

i've used: 1. revolut - these guys are complete jokers. closed after being asked to provide the proof of funding 3 times in 3 months. 2. hsbc/first direct - somewhat decent. but i only use it to top up my other accounts. i try to avoid them, as they're just too big. 3. starling - simple, no-nonsense banking from a startup. 4. revolut business - had my account closed down by the "bank" because they didn't want my busi…

If you need a EUR account with a good app, TransferWise, who power Revoluts multicurrency action on the backend, are pretty decent. Horrid luminous green card though. I'm an investor in Revolut due to their aggressive growth strategy, but I wouldn't use them personally. As for Monzo, I like their app but missing features like being able to view your full CVV number in app, or link the app to all your other bank accou…

Aw I kinda like the brutally green card :D

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

#268

Post by MrMan »

throwaway23819 wrote: post #159
throwawaaaaay17 wrote: post #134

Earlier quoted context omitted.

I am a big fan of IBKR, but if you want someone who will be there in the morning... Pick someone bigger. Fidelity, for example, is Too Big To Fail. They will get bailed out if something happens. Not 100% sure that Interactive brokers will be.

Does Fidelity have an API?

My rep at fidelity said they don’t really have the same offerings.

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

#269

Post by yhoneycomb »

cced wrote: post #249
prohobo wrote: post #243

Earlier quoted context omitted.

To be honest, it doesn't really matter. This isn't about whether Robinhood technically must or must not do what they're doing, but that the system is setup in such a way that all these claims of "supporting the people" are fundamentally 100% bullshit. Robinhood tanked their credibility by letting the mask slip and people are on that like hyenas because of the irony. Really though, the focus on them is a distraction f…

> Really though, the focus on them is a distraction from the much larger slip by the entire financial system. Exactly. I also watched the recent CNBC interview with Chamath Palihapitiya [1]. I would like to it, but CNBC keeps taking it down. In any case, the host really doesn’t seem like he’s there to « get to the bottom of things or to understand » but to push the idea that the problem is anything other than the pre…

This one? https://www.youtube.com/watch?v=wgYZk9Mc804

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

#270

Post by MrMan »

mkl wrote: post #94
Elv13 wrote: post #70

Earlier quoted context omitted.

Stocks don't belong to you, unless you have the actual physical stock. Everybody borrow them from 3rd party who borrow them from 3rd party who borrow them from 3rd party, who actually lended them multiple time to short the stock, who borrow them from a 3rd party, who actually have the physical piece of paper in a vault somewhere. I am not even joking. And it's the same for transactions or your bank balance. The bank…

If I understand correctly, it's actually even stranger: "Nobody owns stock. What you own is an entitlement to stock held for you by your broker. But your broker doesn't own the stock either. What your broker owns is an entitlement to stock held for it by Cede & Co., which is a nominee of the Depository Trust Company, which is a company that is in the business of owning everyone's stock for them." - https://www.bloomb…

Which system evolved partly to make it more straightforward for custody to be resolved when a broker goes out of business
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