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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

#41

Post by MattGaiser »

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.

Would you have kept it with a near insolvent one?

I suspect they lost you as a customer either way.

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

#43

Post by dmichulke »

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 criminal, market manipulation by being a victim themselves.

The billion is probably for the lawsuits.

Can someone with a deeper knowledge chime in as to what could have happened so that it fits their narrative?

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

#45

Post by killaken2000 »

MattGaiser wrote: post #41
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.

Would you have kept it with a near insolvent one? I suspect they lost you as a customer either way.

>I suspect they lost you as a customer either way.

yes

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

#46

Post by peytn »

MattGaiser wrote: post #41
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.

Would you have kept it with a near insolvent one? I suspect they lost you as a customer either way.

They’ve had a number of technical issues over the past year, and I’ve given them the benefit of the doubt. This is the last straw for me personally.

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

#47

Post by Dma54rhs »

handmodel wrote: post #4
AndrewBissell wrote: post #3

So they put a halt on opening new positions not to protect their customers, but because it was straining their own liquidity position. They're certainly not the first broker to choose lying to the public over confessing to liquidity issues -- although I would say they're much more likely to weather this storm than their predecessors.

I mean - it has been revealed to be a shitty broker but I'm not sure if those two things are that different? If this afternoon Robinhood didn't have 1B secured how could it have taken the orders without violating every trading regulation in the book? They would either have had to lie to the people they were buying from or lie to their clients.

They should have disabled at some point new sign ups maybe? Why they didn't do that instead, probably tons of people first time to sign up with them to join the banter.

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

#48

Post by shcheklein »

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…

I think this is a good thread that answers some of those questions - https://news.ycombinator.com/item?id=25951475 . Also curious if there were other ways though.

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

#50

Post by virgilp »

jansan wrote: post #40
anticristi wrote: post #33

Dear Hollywood, Please make a movie out of this.

The Squeezed Short Edit: If you haven't watched "The Big Short" yet, watch it! Tonight!

WSB proposed "the retarded short" (they affectionately call themselves retards)
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