Robinhood is in a tough position. Retail is going crazy for the stock because it seems like everyone else is, and is clearly not based on fundamentals. But what can Robinhood do? It’s possible the huge institutional shareholders have sold off their positions to main st and now they will get stuck holding the bag. Fidelity and Blackrock might have made $10B each from this runup while selling to these buyers. Most folks will have huge losses.
The WSB narrative is that it’s Melvin capital holding all of those short shares, and they want to stick it to them. But we don’t really know how many shares they actually hold, surely they aren’t 100% of the short interest. It will be very interesting once all this unwinds and we see who was holding what.