RH is a front for organised crime, selling data to Citadel so the can front run retailers trades. Hope to see Senate action on it at some point.
Whether Robinhood should have had more capital or how those margin requirements were handled is a serious question but that's entirely separate than these accusations which seem to be made by people who have no idea how the system actually works.
> supporting the short selling hedge funds
Just to be clear: Robinhood claims that they prevented buying certain stocks because of increase collateral requirements by DTCC due to high volatility. Do you have any evidence that's untrue. Let's establish that before we move on to the claim that Citadel front-runs retail flow.
If your strategy for driving a short squeeze, or a pump-and-dump does not take into account counterparty risk, you are going to get taken to the cleaners. When you making money causes the brokerage you are using to be unable to execute that trade, this is 100% your fault.
As the saying goes, don't invest in financial instruments you don't understand. Entering a long position in a volatile, high-volume stock through a discount brokerage was a financial instrument that most of /wsb did not understand, and it blew up in its face.
The people who will invest in the IPO aren't going to be the people who lost money due to RH locking the purchasing of stocks and stopping the price from sky rocketing.
But in terms of a customer base, in terms of a company, RH are dust.
Yes but RH didn't have the billions of $$$ deposited at the clearing house for their trades to be honored. Buying stock to settle a few days later requires collateral that RH didn't have.
It may help to read through the answers: https://money.stackexchange.com/questions/136272/why-would-c...
This is why they scrambled at the last minute to raise billions to meet the higher collateral requirements: https://www.google.com/search?q=robinhood+2.4+3.4+billion
RH does some questionable things but their "restriction of the buying" is an inevitable consequence of not having the billions to meet any margin calls. They were the tail not the dog.
Right, because sell orders would lower the clearinghouse margin requirements. If there are $100M GME buys on RH with 2 days to clear and $100M GME sells with 2 days to clear, their clearinghouse margin requirement is $0.