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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

#271

Post by toyg »

michaelt wrote: post #266
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…

Not an expert by any means, but I know in the world of trading there is often the requirement of guarantees before transactions are accepted. It's like your kid, at the store, was asked to show he actually had $100, before his $5 could be accepted and milk handed over.

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

#272

Post by MrMan »

prohobo wrote: post #243
cced wrote: post #242

I don’t understand how all of a sudden the shift was made onto the insolvency of RH and that the discussion is less about the original conditions that led up to this. I just finished watching a video from Louis Rossmann [1] as well as one from Bruce Fenton [2]. In his video, Rossmann covers the technicalities and systems behind actually __making__ a trade with an app like RH. The videos were very informative and I le…

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…

What much larger slip ? Risk management practices?

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

#273

Post by irjustin »

michaelt wrote: post #266
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…

In RH everyone who opens an account starts as an Instant amount.

The Instant means any security sold you can immediately use that cash.

Normally you can't go that. You have to wait 3 days for it to settle in the clearing House. The Instant accounts are using margin to make the cash instantly available.

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

#274

Post by joncrane »

nmca wrote: post #190
onethought wrote: post #184

Earlier quoted context omitted.

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 a…

Did you report them to a regulator?

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

#275

Post by dkirill »

throwaway23819 wrote: post #158
danr4 wrote: post #143

Earlier quoted context omitted.

Have you seen the CNBC interview [1] with IBKR chairman, basically saying "once the stock goes back to the price we want we'll let retail investor trade it again"? [1] https://www.youtube.com/watch?v=7RH4XKP55fM

Just saw the interview, looks about what I'd expect from IBKR and why I use them.

So you are ok with your broker restricting your investment options, because one of hedge funds they sell your order flow to made a bunch of dumb decisions which put the whole market into very fragile position?

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

#276

Post by MrMan »

T0Bi wrote: post #219
egwor wrote: post #192

Earlier quoted context omitted.

So the market price which is made from all transactions from all brokers will drop because robinhood users could not buy. That makes no sense to me. If they really wanted to buy they could use another broker? If the market really is dropping then tough luck. You can lose all your money investing in the stock market. If you're leveraged you can lose even more (which might explain why some accounts were closed).

It takes days to get approved with another broker and transfer money there. As we saw, the damage was already done. Most retail investors only use Robinhood, why have 2 different brokers?

why have 2 different brokers?

Days like this are exactly why you should always have more than one bank and more than one broker !

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

#277

Post by PartiallyTyped »

codesternews wrote: post #224
egwor wrote: post #192

Earlier quoted context omitted.

So the market price which is made from all transactions from all brokers will drop because robinhood users could not buy. That makes no sense to me. If they really wanted to buy they could use another broker? If the market really is dropping then tough luck. You can lose all your money investing in the stock market. If you're leveraged you can lose even more (which might explain why some accounts were closed).

I think you are naive and don’t know what’s happening. GME is emotional and hype play. They got so much coverage and all the retail people were driving prices up have robinhood platform. You cannot open the account within same day even if people wantto buy. Robinhood played with people physchology. After seeing the price drop everyone wanted take profits out because even if people want to buy they couldnot. It was lo…

Except people didn't take profits, WSB saw right through it, they/we urged everyone to hold, remove stop losses, and buy with cash/not margin.

The people held and the volume was low.

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

#278

Post by zekrioca »

kryogen1c wrote: post #265
prohobo wrote: post #259

Earlier quoted context omitted.

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 act…

> 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?

The person has already answered it:

>> the kind that institutions do all the time without having these kinds of problems.

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

#279

Post by MrMan »

beagle3 wrote: post #237
egwor wrote: post #195

Earlier quoted context omitted.

Hasn't SI/Float been around there for more than a year? I'm not an expert on this. Source: https://www.ortex.com/symbol/nyse/gme/short_interest

Seems like the 100% line was crossed in Jun 2019 - and it does indeed mean that going long since that point, at almost any price was fundamentally sound investment and not ponzi; It is a pyramid, but the base layer of “suckers”, those that end up taking the losses in a standard ponzi/pyramid are already determined ; they are the most finance literate people in the market, and they did it willingly. WSB is just adding…

Investment ? Not sure about that

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

#280

Post by Kaze404 »

kryogen1c wrote: post #254
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…

> 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.

What a world where people are more concerned about a single company going under than the fact that the working class is finally doing something against the rigged capitalist system.
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