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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

#71

Post by kegbuna »

sdan wrote: post #15

One interesting thing that happened today as I was selling my AMC stock/options is that they executed lightning quick. Normally Robinhood (especially this morning) takes time to sell these options, yet they were immediately picked up. Would be crazy to think short sellers were buying up all the sell side stocks/options while retail were panic selling, to hedge against their shorts.

This feels so likely when only retail investors were banned from buying. Who exactly is buying up all these shares then? Fingers only seem to point in one direction.

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

#72

Post by deepGem »

gryz wrote: post #58
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.

Do users actually lose the stocks, if something that happens to the Robinhood itself? I live under assumption that it is not happening. In any case stocks should stay belonging to the folks who purchased them.

I doubt users will lose the stocks. This will be really weird. Worst case, you will be given some time to transfer your stocks to another brokerage and perhaps RH will make that process a lot faster than the nominal 2-3 days it takes now.

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

#73

Post by ivalm »

vmception wrote: post #60
ivalm wrote: post #30

Earlier quoted context omitted.

I mean the fraud here is fairly eh. They gave a smaller price improvement (but still beat nbbo) relative to other discount brokerages. The lie was that they delivered same great price as other discount brokerages. However, most of their clients were small and still net-saved money by not paying the flat fee. The practice ended in 2018.

yeah they lied about revenue sources and why they were able to offer low prices. would have been better if they just shut up and didn't try that hook.

Sure, but as far as frauds go it is fairly victimless. Their users were likely winners in the aggregate for using RH

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

#74

Post by Closi »

amscanne wrote: post #54
sdan wrote: post #17

Earlier quoted context omitted.

And right after saying they don't have any liquidity problems said, "We're #1 on the app" while retail investors were losing millions because of expiring options/stocks. Absolutely tone-deaf. Not denying that all securities have risks, but that was a bad response imo.

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.

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

#76

Post by sidibe »

amscanne wrote: post #54
sdan wrote: post #17

Earlier quoted context omitted.

And right after saying they don't have any liquidity problems said, "We're #1 on the app" while retail investors were losing millions because of expiring options/stocks. Absolutely tone-deaf. Not denying that all securities have risks, but that was a bad response imo.

Retail investors lost millions because of an inability to buy?

The people who probably would have lost their money anyways (because they were waiting for more suckers to push the price higher) now have an excuse (other retail buyers couldn't open new positions). People who realized those were the suckers stomached selling while it wasn't as high as yesterday but still astronomical.

The anger at Robinhood reminds me of when the government in Nigeria cracked down on MMM ponzi scheme. People were furious because they all assumrd they wouldn't be the bag holders at the end. But here there's been a full day to close positions so I'm fairly sure the people who aren't doing it now wouldn't have done it whenever the stock starting going down in other circumstances

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

#77

Post by blueblisters »

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…

Are brokerage deposits / holdings protected by insurance? I'm genuinely fearful of losing my holdings in Robinhood at this point.

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

#78

Post by [deleted] »

peytn wrote: post #46
MattGaiser wrote: post #41

Earlier quoted context omitted.

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.

[deleted]

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

#79

Post by throwawaysea »

julienreszka wrote: post #29
throwawaysea wrote: post #23

So much for the conspiracy theory about Robinhood changing policies to favor institutional traders over retail investors. Speculation is healthy but I am surprised to see so many educated people fall for social media fear mongering to the point that they decided to drive down Robinhood’s app reviews. Many of my friends who ate up all the outrage are the same people who laughed at QAnon conspiracy theorists, but here…

>Speculation is healthy I've never seen somebody say speculation is healthy but rather the opposite. Care to elaborate?

What I meant was that speculation and challenging the existing narrative plays a role in seeking the truth. So it has value and can be healthy. But it has to be treated for what it is - speculation. In this case, the actions of brokers should be investigated, and regulatory requirements should be scrutinized. But taking speculation as a foregone conclusion and resorting to an extreme reaction as such, is not healthy.

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

#80

Post by vmception »

ivalm wrote: post #73
vmception wrote: post #60

Earlier quoted context omitted.

yeah they lied about revenue sources and why they were able to offer low prices. would have been better if they just shut up and didn't try that hook.

Sure, but as far as frauds go it is fairly victimless. Their users were likely winners in the aggregate for using RH

Moving back to my actual point, the SEC and DOJ should leverage this prior settlement to enforce stricter sanctions.

The mere existence of the prior action makes them cannon fodder. Hit them.

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