- Robinhood raised $ 1 billion from existing investors this week.
- The trading platform is struggling with an increase in the trading of some stocks, including GameStop.
- On Thursday, the company also borrowed “several hundred million dollars” from banks.
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Robinhood raised $ 1 billion from his existing investors this week, The New York Times reported.
The company is struggling to cope with an increase in trading on the platform involving a series of actions that have come under slight pressure, driven in large part by the WallStreetBets Reddit forum, a group of retail traders who helped raise the company’s stock prices. GameStop and AMC Theaters, among others.
Robinhood CEO Vlad Tenev said on Thursday that the company had no liquidity problems after Bloomberg said the company had borrowed “at least several hundred million dollars” from banks amid commercial chaos. .
Read More: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped reduce Melvin Capital’s short positions
The trading platform also temporarily halted purchases of certain shares, generating outrage from lawmakers and business leaders.
In an email sent to Robinhood users on Thursday, the company said that limited purchases of these stocks would be allowed on Friday, but that it would continue to “monitor the situation and make adjustments as needed”.
“To be clear, the decision was not made based on the direction of any market maker we target or other market participants,” the statement continued.
Robinhood still needed more money to avoid implementing new trade restrictions, two sources told The Times.
Private company investors include venture capital firms Sequoia Capital and Rabbit Capital, which provided additional funding on Thursday, The Times reported.
“This is a strong sign of investor confidence that will help us continue to serve our customers,” a Robinhood spokesman told The Times.
On Thursday, a dozen House Republicans sent a letter to the head of the Securities and Exchange Commission, asking him to investigate a possible collusion between Robinhood and any hedge funds.