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Robinhood Raises Another $2.4B from shareholders

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Re: Robinhood Raises Another $2.4B from shareholders

#91

Post by jessaustin »

swampthing wrote: post #61
jessaustin wrote: post #46

Earlier quoted context omitted.

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…

That is the narrative that the mob would like you to believe, but it's actually not true. Here are some examples of that happening in the past: * https://mobile.reuters.com/article/amp/idUKKCN2253T2 * https://mobile.reuters.com/article/amp/idUSKBN1FT2S4 Robinhood was in a no-win situation. You can read about why they were forced to restrict buying here: https://www.cnbc.com/2021/02/01/elon-musk-on-clubhouse-robin...…

Those other cases seem fairly obscure, prevented people from buying plummeting assets, and might not have been so defensible themselves. The reason cited was to protect foolish small investors. This is fundamentally a different thing than intentionally damping the rise of a security that has been up over 100% for nearly a week. That didn't protect any small investors. Whom did it protect?

Somehow I doubt perjury attaches to an untranscripted chat on a celebrity-only private audio app. Everything at that third link seems highly lawyered: "From our perspective", "I wouldn’t impute", passive voice, etc. From a guy named "Vlad" who looks like Dracula. I guess it was just prejudice that caused me to expect someone from Sherwood...

Re: Robinhood Raises Another $2.4B from shareholders

#92

Post by crazygringo »

vincentmarle wrote: post #88
crazygringo wrote: post #45

Earlier quoted context omitted.

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.

If you have a CEO that keeps publicly lying and downplaying their actual issues, then yes, you do erode the trust.

Where did the Robin Hood CEO lie? Or what issues have they downplayed?

I haven't seen any actual reporting of any lies. Just a bunch of people speculating they were colluding in halting trading, when the actual reason was later demonstrated to be capital requirements.

If you have actual recent examples of lying, however, I'm curious.

Re: Robinhood Raises Another $2.4B from shareholders

#93

Post by crazygringo »

mdoms wrote: post #82
crazygringo wrote: post #41

Earlier quoted context omitted.

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 speculat…

If they have the capital why aren't the opening up trading on GME fully? I'm not saying the capital requirements aren't real, I'm saying that's not the complete and honest explanation for why they're restricting trading on GME. Anyone with two brain cells to rub together can see their conflict of interest here.

Because volatility is changing daily, risk estimates are changing daily, and capital requirements are changing daily.

Do you have any proof that's not the complete and honest explanation? Because it sure seems sufficient to me, nothing further needed.

And please refrain from derogatory comments like "anyone with two brain cells can see" here on HN. It's against the guidelines.

Re: Robinhood Raises Another $2.4B from shareholders

#94

Post by swampthing »

jessaustin wrote: post #91
swampthing wrote: post #61

Earlier quoted context omitted.

That is the narrative that the mob would like you to believe, but it's actually not true. Here are some examples of that happening in the past: * https://mobile.reuters.com/article/amp/idUKKCN2253T2 * https://mobile.reuters.com/article/amp/idUSKBN1FT2S4 Robinhood was in a no-win situation. You can read about why they were forced to restrict buying here: https://www.cnbc.com/2021/02/01/elon-musk-on-clubhouse-robin...…

Those other cases seem fairly obscure, prevented people from buying plummeting assets, and might not have been so defensible themselves. The reason cited was to protect foolish small investors. This is fundamentally a different thing than intentionally damping the rise of a security that has been up over 100% for nearly a week. That didn't protect any small investors. Whom did it protect? Somehow I doubt perjury atta…

> That didn't protect any small investors. Whom did it protect?

This question is irrelevant in the case of Robinhood, because they had no choice. It seems like that is also fundamentally why they didn't restrict selling — because they wren't required to, whereas they were required to restrict buying. I.e. they imposed the minimum necessary restrictions. This is exactly what you would want from someone in Robinhood's position. You don't want them making their own decisions about who can buy or sell.

> Somehow I doubt perjury attaches to an untranscripted chat on a celebrity-only private audio app. Everything at that third link seems highly lawyered: "From our perspective", "I wouldn’t impute", passive voice, etc.

If something was highly lawyered, do you really think they would go with a lie that would be this easy to disprove? I.e. a lie that relies on people with no interest in Robinhood to uphold it?

> From a guy named "Vlad" who looks like Dracula. I guess it was just prejudice that caused me to expect someone from Sherwood...

I don't know that it makes sense to base whether or not you believe him on things he has no control over.

Re: Robinhood Raises Another $2.4B from shareholders

#95

Post by ZephyrBlu »

ping_pong wrote: post #87
ZephyrBlu wrote: post #59

Earlier quoted context omitted.

A lot of total noobs have showed up on /r/wallstreetbets, I'm not at all surprised that there have been so many new accounts opened. People who've never been in the market before in their life seem to have jumped on $GME.

But Thursday is when they stopped trading GME. I can't believe that people would be stupid enough to go into RH to trade when the entire WSB is talking about how RH screwed them.

I think it's spread far beyond Reddit at this point.

Re: Robinhood Raises Another $2.4B from shareholders

#96

Post by r00fus »

crazygringo wrote: post #42
abluecloud wrote: post #18

Earlier quoted context omitted.

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.

You migrate your new buy activity into Fidelity and leave your existing stock in RH (you can still sell).

At some point, either migrate your holdings from RH completely or sell them off and move money to Fidelity.

Done.

Re: Robinhood Raises Another $2.4B from shareholders

#97

Post by TopInvestor »

dehrmann wrote: post #35
TopInvestor wrote: post #26

https://www.sec.gov/comments/s7-08-09/s70809-407a.pdf Related: The Counterfeiting of Shares of Fannie Mae and Freddie Mac A. Counterfeiting Stocks Through Electronic Delivery Naked short selling is cute terminology developed by Wall Street to confuse the fact that this is simply a method of counterfeiting shares of U.S. publicly traded companies. At a speech at the Mayflower Hotel in Washington D.C. on November 16, 2…

How does this relate to Robinhood raising more funds from investors?

Citadel, 1.8 mill shares missing because of naked short selling, because they are counterfeit, because all hedge funds are doing this , because connect the dots, because the game is rigged, because it is illegal. At the end RH is in the game selling the stock owned by investors without their consent.

Re: Robinhood Raises Another $2.4B from shareholders

#98

Post by ac29 »

Accujack wrote: post #73
kcg wrote: post #57

Earlier quoted context omitted.

Except you're completely conflating terms and numbers here. A stock can have over 100% short interest with no naked shorting occurring. >100% short interest DOES NOT imply that there is naked shorting.

It doesn't guarantee that it's occurring, but it's strong indicator that something sketchy is happening. In this case, the important point is that a hedge fund with a 140% short position is more vulnerable to loss than a hedge fund with a 100% short position.

> In this case, the important point is that a hedge fund with a 140% short position is more vulnerable to loss than a hedge fund with a 100% short position.

Sure, but only in the sense that a fund is also more vulnerable to loss at 80% short than 40% short. Nothing magic happens between 99% and 101% short.

Re: Robinhood Raises Another $2.4B from shareholders

#99

Post by vincentmarle »

crazygringo wrote: post #92
vincentmarle wrote: post #88

Earlier quoted context omitted.

If you have a CEO that keeps publicly lying and downplaying their actual issues, then yes, you do erode the trust.

Where did the Robin Hood CEO lie? Or what issues have they downplayed? I haven't seen any actual reporting of any lies. Just a bunch of people speculating they were colluding in halting trading, when the actual reason was later demonstrated to be capital requirements. If you have actual recent examples of lying, however, I'm curious.

> Where did the Robin Hood CEO lie? Or what issues have they downplayed?

Let's see, where do I start.

Official blog announcement: https://blog.robinhood.com/news/2021/1/28/keeping-customers-...

No mention of liquidity requirements whatsoever.

Cuomo Interview: https://twitter.com/CuomoPrimeTime/status/135498974615878451...

Cuomo: "If you don't have a liquidity issue, but you have to stop the trading because you couldn't meet certain capital requirements, how does that reconcile with itself?"

Vlad: "We feel pretty good about the situation"

CNBC Interview: https://www.youtube.com/watch?app=desktop&v=cuCcchMOsKE

Sorkin: "It sounds to me though, that you're suggesting that there was a liquidity problem"

Vlad: "No, no, there was no liquidity problem."

Elon Musk interview:

Musk: “hey what happened with robinhood”

Vlad: “uhhhh I don’t know I was asleep at home”

Re: Robinhood Raises Another $2.4B from shareholders

#100

Post by ac29 »

jessaustin wrote: post #46
SEJeff wrote: post #14

Earlier quoted context omitted.

> 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…

> It is very strange for brokers to enforce one-way trading in a security as Robbinhood did, and highly suspicious on top of that

My understanding is that brokers must execute their customers trades if possible. The collateral requirement they ran into only affected purchases, hence why buys were restricted but sells were not.

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