Robinhood Raises Another $2.4B from shareholders • Hacker News Board

Re: Robinhood Raises Another $2.4B from shareholders

#41

Post by crazygringo » Mon, Feb 01, 2021, 5:47 PM UTC

mdoms wrote: post #25

themihai wrote: post #3

The stocks(GME) are still limited/restricted btw

With a $3.4b warchest this entirely undermines their (plainly untrue) narrative about restricting the stock due to capital requirements.

Um, no. The "war chest" is in order to meet the capital requirements. It says so right in the article.

I mean, you think the owners are diluting their ownership just for fun? Nobody does that.

Also why do you think the capital requirements are untrue? There have been plenty of factual articles describing the precise increase that was required and how it was spread across different trading platforms.

It's not speculation, it's well-document fact.

Re: Robinhood Raises Another $2.4B from shareholders

#42

Post by crazygringo » Mon, Feb 01, 2021, 5:49 PM UTC

abluecloud wrote: post #18

r00fus wrote: post #8

Earlier quoted context omitted.

Lots of chatter on /wsb talking about Fidelity migration. I'm not sure how that translates into actuals - like the WhatsApp migration it may be severe or it might be a tempest in a teapot. But at least it identifies who are they real customers for RobinHood.

not quite the same as whatsapp, you're isolated. you dont need your friends to move, it's something you can do on your own. "reports" that i'd read said that fidelity were getting something like 600% increase in signups (who knows if thats because of this movement or because people hate RH).

Very true. But on the other hand, it ties up your investments for several days.

Moving means totally removing yourself from the market precisely at the time when big swings are happening, which many people might not want to risk. So it's actually pretty tricky, not frictionless or anything.

Re: Robinhood Raises Another $2.4B from shareholders

#43

Post by SpicyLemonZest » Mon, Feb 01, 2021, 5:49 PM UTC

Accujack wrote: post #27

loceng wrote: post #5

This is a fascinating game to watch. I watched The Big Short yesterday for the first time, as it's trending on Netflix and was suggested, and this moment feels similar to exposing a weakness in the system that needs to be addressed - and hopefully not to strengthen the wrong position; I didn't realize the incredible actors cast for it, obviously they took on the roles as it's an incredibly important story for the gen…

Yes. If you read what the ultimate intent of the /r/wallstreetbets crowd is, they're not just trying to exercise the same right to make money off of the financial system that billionaires have. A year ago, the person that started this detected a situation where GME was a company that didn't have long term prospects, wasn't losing money, but was still shorted to 140% of it's value. It's not supposed to be possible to…

I think you need to seriously consider the possibility that the people spreading this narrative are doing so dishonestly in order to pump the stock. Short interest is now far below 100% (https://www.bloomberg.com/news/articles/2021-02-01/gamestop-...), yet /r/wallstreetbets is still full of hold memes rather than victory speeches.

Re: Robinhood Raises Another $2.4B from shareholders

#44

Post by et-al » Mon, Feb 01, 2021, 5:49 PM UTC

milesdyson_phd wrote: post #11

Jtsummers wrote: post #4

Earlier quoted context omitted.

People still use Bank of America and Wells Fargo despite the incredibly customer-hostile things they've done in the past. I will not be surprised if Robinhood weathers this pretty well after a short term hit.

I wonder how/if age demographics play into that, especially with regards to millenials/gen z.

When doing the right thing takes more work than the current situation, people are probably going to do nothing as long as it's not too uncomfortable. It's akin to canceling subscriptions.

I lazily left my 401k at my previous job "running" for 18 months before finally rolling it into my personal IRA. I'm sure I'm not alone in this.

Re: Robinhood Raises Another $2.4B from shareholders

#45

Post by crazygringo » Mon, Feb 01, 2021, 5:50 PM UTC

vincentmarle wrote: post #20

We are starting to see the limits these apps have, they are just not cut out to be considered a professional broker. It's funny they worry so much about (short-term) liquidity, while their long-term brand & trust & customer base erodes irrecoverably by the minute.

Huh?

They're worrying about short-term liquidity in order to provide serve in order to maintain their brand, trust, and customer base.

That's... the entire source of the problem. Meeting capital requirements in order to keep running.

Re: Robinhood Raises Another $2.4B from shareholders

#46

Post by jessaustin » Mon, Feb 01, 2021, 5:51 PM UTC

SEJeff wrote: post #14

f430 wrote: post #9

It puzzles me how people still think Robinhood can remain competitive knowing they sell user's order flow to hedge funds and restricted free market movement of capital in the markets. Still restricting purchases of GME and looks like this was just to keep the lights on. There isn't going to be an IPO after this GME fiasco. The founders played themselves and possibly will never be trusted again. Also the people who in…

> It puzzles me how people still think Robinhood can remain competitive knowing they sell user's order flow to hedge funds Many brokers do this. They get better execution services from hedge funds / electronic traders than they could possibly build themselves. Given rules like NBBO for equities, this can really matter. It saves them money in engineering a hard problem AND makes them money from the other side.

You cut off the end of the proposition: "...and restricted free market movement of capital in the markets."

It is relatively common for brokers to sell order flow. It is not unheard of for brokers to stop trading in a security for limited periods. It is very strange for brokers to enforce one-way trading in a security as Robbinhood did, and highly suspicious on top of that when the resulting asymmetric trading regime is of enormous commercial benefit to the biggest purchaser of their order flow.

Re: Robinhood Raises Another $2.4B from shareholders

#47

Post by Accujack » Mon, Feb 01, 2021, 5:53 PM UTC

djbebs wrote: post #32

Accujack wrote: post #27

Earlier quoted context omitted.

Yes. If you read what the ultimate intent of the /r/wallstreetbets crowd is, they're not just trying to exercise the same right to make money off of the financial system that billionaires have. A year ago, the person that started this detected a situation where GME was a company that didn't have long term prospects, wasn't losing money, but was still shorted to 140% of it's value. It's not supposed to be possible to…

Thats not true at all. Its perfectly possible and legal to short beyond 100%

The practice I'm referring to is "naked shorting" which has been illegal since 2008 in the US.

Re: Robinhood Raises Another $2.4B from shareholders

#48

Post by spillguard » Mon, Feb 01, 2021, 5:53 PM UTC

f430 wrote: post #9

It puzzles me how people still think Robinhood can remain competitive knowing they sell user's order flow to hedge funds and restricted free market movement of capital in the markets. Still restricting purchases of GME and looks like this was just to keep the lights on. There isn't going to be an IPO after this GME fiasco. The founders played themselves and possibly will never be trusted again. Also the people who in…

I think that there's a bit of a disconnect between asserting that Robinhood's IPO is dead and being in the comments of an article about them raising "more [cash] than the company has raised in total up until [this] point". Investors clearly see potential in the company.

Re: Robinhood Raises Another $2.4B from shareholders

#49

Post by dpiers » Mon, Feb 01, 2021, 5:53 PM UTC

Armisael16 wrote: post #36

Accujack wrote: post #27

Earlier quoted context omitted.

Yes. If you read what the ultimate intent of the /r/wallstreetbets crowd is, they're not just trying to exercise the same right to make money off of the financial system that billionaires have. A year ago, the person that started this detected a situation where GME was a company that didn't have long term prospects, wasn't losing money, but was still shorted to 140% of it's value. It's not supposed to be possible to…

>It's not supposed to be possible to go over 100% any more since 2008, by the way. This is fundamentally untrue. Abusive naked shorting with the goal of driving down prices is illegal. >100% short interest doesn’t require naked shorting at all. If person A borrows a stock from person B then sells it to person C, they can borrow the stock back from person C and sell it again. No naked short involved.

Call it a scantily-clad short then. A share that is already lent out to a short seller should not be eligible to be lent out again for the same reason I can't get two mortgages to buy the same house - the underlying collateral would be owed to multiple parties.

Re: Robinhood Raises Another $2.4B from shareholders

#50

Post by tedunangst » Mon, Feb 01, 2021, 5:53 PM UTC

djbebs wrote: post #32

Accujack wrote: post #27

Earlier quoted context omitted.

Yes. If you read what the ultimate intent of the /r/wallstreetbets crowd is, they're not just trying to exercise the same right to make money off of the financial system that billionaires have. A year ago, the person that started this detected a situation where GME was a company that didn't have long term prospects, wasn't losing money, but was still shorted to 140% of it's value. It's not supposed to be possible to…

Thats not true at all. Its perfectly possible and legal to short beyond 100%

It's amazing how we're on day 10 of this adventure and people still show up like this is the first and only thread.