After a turbulent week for the stock market and halts to the trading of certain speculative securities including GameStop (GME) and AMC, consumer investing app Robinhood has raised new capital. The new funds total more than $1 billion, with the company telling TechCrunch that they were raised from its existing investor base.
The New York Times reports that the company raised the new equity capital after tapping its credit lines for $500 to $600 million; the company did not answer a question from TechCrunch regarding its credit lines.
The reported drawdown matches reporting from yesterday indicating that Robinhood had accessed nine-figures of capital to ensure it had enough funds on hand to meet regulatory minimums and other requirements related to its users’ trading activity.
The unicorn consumer fintech company halted trading in stocks like GameStop that had become the center of the trading storm yesterday, leading to frenetic accusations from incensed users that something nefarious was afoot. Later in the day the clearing house entity powering trading for other consumer trading services also halted service for a similar set of stocks.
Robinhood told users that it would allow trading to begin in some fashion today in shares it had previously restricted.
One result of the current climate is a boom in demand for trading apps. Today on the US iOS App Store, Robinhood is ranked first; Webull, a rival service is second; Reddit, a hub for trading gossip mostly via r/WallStreetBets is third; Coinbase a popular crypto trading service is fourth in line. Square’s Cash App, which allows for share purchases is ranked seventh, Fidelity’s iOS app comes in tenth place, and TD Ameritrade is 16th. Finally, E*Trade’s own app is ranked 18th. That’s a good showing for fintech, both startup and incumbent alike.
No one knows what comes next, how the trades play out, and if the present-day surge in retail interesting in stock trading will persist. What does seem clear, however, is that today is going to be very silly.SIGN UP