Robinhood raises another $ 2.4 billion from shareholders

Robinhood has been flooded with demand for trading a handful of popular stocks over the past week.


Tiffany Hagler-Geard / Bloomberg News

Robinhood Market Inc. raised another $ 2.4 billion from shareholders, days after investors agreed to pump $ 1 billion into online brokerages, helping to drive out a trading frenzy in Gametop’s popular shares. Inc.

There has been a huge $ 3.4 billion increase since last Thursday, which has increased until Robinhood gives a war chest to cover the increase in collateral requirements stemming from the business boom, the people said. . People said the company should allow it to support thousands of new accounts opened since Thursday and remove many trade restrictions that have angered popular brokerage customers.

The fundraising deal was structured as a note that later states the option to purchase additional shares at a discount, the people said.

Traders have flooded Robinhood over the past week with orders to buy and sell popular stock. The sharp change in the value of those shares prompted the clearinghouse that processes and settles to ask for more cash to cover potential losses to the transaction.

In an interview posted online late Sunday, Robinhood chief executive Vlad Tenev said the clearinghouse initially asked for $ 3 billion to return the trades— “an order of more than what it usually is.” about.” He spoke in an interview with Tesla on Sunday night Inc.

Boss Elon Musk on a live stream of the clubhouse, an invitation-only social-networking app popular in Silicon Valley.

Robinhood on Thursday restricted trading in more than a dozen shares and related options, which required the amount of collateral to be reduced to $ 700 million. It has loosened many restrictions, but some trade limitations remain.

According to analysts at JMP Securities, Robinhood’s app was downloaded over 600,000 times on Friday alone. During the market turmoil in March, Robinhood’s app was downloaded only 140,000 times on the most active day of that month.

more to come…

write to Peter rudgeyer at [email protected]

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