In brief
- Robinhood, the stock trading service at the center of the Gamestop fiasco, has raised $2.4 billion from investors, per the Wall Street Journal.
- It raised $1 billion last week, and borrowed hundreds of millions from banks.
- The funds are meant to meet the uptick in deposits.
Robinhood, the online brokerage service that’s seen a surge in Gamestop- and AMC-related activity over the past week, has raised another $2.4 billion from investors, per the Wall Street Journal.
The cash infusion follows last week’s $1 billion raise, and increased reliance on Robinhood’s existing credit lines; the money will collateralize the uptick in trading activity and help meet increased pressure from Robinhood’s clearinghouses.
The Journal noted that the $3.4 billion is more than the company has raised, total, until now.
Robinhood saw unprecedented demand last week, as an army of retail traders on Reddit’s r/wallstreetbets message board banded together to pump the price of stocks like Gamestop, AMC, Nokia, and Blackberry. As things began to snowball, downloads of the Robinhood app shot up: on Friday alone, Forbes reports, there were “about 1 million” downloads.
Robinhood restricted users’ ability to buy into certain stocks last week, introducing limits for how many new shares each trader could buy, before relaxing the requirements slightly; the number of restricted stocks is down from 50 to 8, but investments in Gamestop are still capped at just one share.
Some customers have already sued the app, alleging market manipulation.
Dogecoin—the “meme coin” that saw a huge price increase last week as disgruntled traders turned their attention to crypto—remains listed on Robinhood, though instant deposits are unavailable for all cryptocurrencies.