Will they halt trading their own stocks?

It'll be a huge problem if they try that the first time they have a really bad quarter and stop their own trading. But I could see them trying if we have a "business favorable" FTC.

Would it be breaching their fiduciary duty to shareholders if they facilitated sell-offs that decreased their own stock price :face_with_monocle:

It doesn’t seem to be an issue for Charles Schwab

Fine, an unfortunate technical issue it is.

Oopsie!

No problem, just prevent selling.

Do brokerages even have a fiduciary duty?

Public companies with shareholders do, right?

They probably need to list before they report the user loss from this last quarter. In that space, it's user growth at all cost. Because selling order flow is how they make money

>They probably need to list before they report the user loss from this last quarter.

that sounds like securities fraud. That's the reason why gamestop didn't do a share offering even though the price was ridiculously overvalued.

>GameStop decided it was restricted under U.S. financial regulations from selling shares because it was in possession of significant information about its finances that was not yet available to the public, the sources said. The SEC requires companies to have released such information when conducting stock sales.

>The information pertained to GameStop’s fiscal fourth quarter, which ended at the end of January. By the time its shares took off in the second half of January, company executives had already compiled data and had a clear picture of what the quarter would look like, the sources said.

>GameStop could have gone ahead with a stock sale by releasing preliminary earnings. But such a move, carried out for the purposes of a stock sale, came with significant logistical hurdles and regulatory risk that the company was not willing to accept, one of the sources said. The SEC had said it would scrutinize how companies took advantage of the trading volatility to sell stock and had asked that they provide more information to investors about the potential risks.

You compare GME with RH, I know apes don't like that.

I expect at the end of next year, a lot of people closing accounts and getting tax info.

Despite all the bad press, I’m betting they increased users/deposits overall. Just like when Facebook/YouTube got “boycotted” and now report record results.

Yeah I bet the actual amount of people that left robinhood was negligible. Loud minority screaming about GME losses, amplified by Wall Street Bets memes.

I wonder if there was actually a net gain. Despite the eventual fallout with the WSB crowd, the run-up to it seems to have brought a lot of people (including non-WSB folks who saw it on the news) to the platform who may have stuck around.

That last group may be flash-in-the-pan types. Got into RH from the GME hype. Them just becomes a zombie after because they weren't ready to open an Investing or Trading account, they just FOMO. Maybe this gives a big userbase-pad for the IPO and masks the fall-off after (by lumping zombies and haters together)

I would be shocked if they saw anything but incredible user growth in the last quarter.

really hope all these people who claim they’ll short it do so i can buy it cheaply. but i’ll predict right now they’ll open at 2x their price

We don't like the stonk

The only way I would buy this stock would be for a pump and dump...

Yep, I’m going to day trade these losers every day.

lol.... you are going to loose

lose*

thanks

If this is ahead of schedule it makes me wonder if they're dumping risk from the recent GME et al fiasco onto the public market - or they're fast tracking it because they need more billions to cover unexpected costs due to GME et al?

My bet is the latter. GME exposed how undercapitalized they were given their customers’ leverage and existing investors probably aren’t interested in/can’t agree on terms for injecting more cash themselves.

Probably, you wouldn’t intentionally IPO immediately after a PR disaster unless you had too.

I really really hope the SEC makes them disclose all the gory details of their “payment for order flow” stuff. I mean, basically, smart people who write about it (Levine, patio11), say it’s harmless/helpful. But I don’t think it sits right with anyone. Certainly not with me .

Short story is, they're making money you don't have access to. Exchanges add fees to every trade that goes through an exchange. If a stock costs $10 with a $1 fee, and someone's willing to sell it to you for $10.50 with a $0 fee, wouldn't you take it? That's fifty cents of price improvement over national best offer. So Citadel batches all the orders for that stock and does one big trade (per stock) at the end of the day, and everything settles out -- you got cheaper stock, they made some money for their trouble. Enough money to kick back $0.20 or so to Robinhood for referring you as a client.

> GME exposed how undercapitalized they were...

Or, more accurately, the extreme volatility of GME led to increased collateral requirements that Robinhood couldn't meet. (It was like billions of dollars, iirc.) Or, otherwise, it's not that Robinhood was undercapitalized (or even is undercapitalized!)—just that the goalposts moved suddenly and unexpectedly.

PFOF is still a little squirrel-y. Ditto on Levine and others, and tied up in all that T+2 settlement issue, too.

I think most people would equate "not meeting collateral requirements" to being undercapitalized.

Although it almost never is the specific purpose, it is always also a purpose.

An exit is an exit, a liquidity event is a liquidity event.

De-risking means being able to support your lifestyle no matter what happens, so this does that regardless of whatever quantum states of adversity could lurk behind the scenes.

I’ll be shorting RH on day 1 by loading up on put options. No way it maintains its value after retail investors slowly transfer their trades and money to a different broker.

No you won't. Options are never available on the first day of an IPO.

I’ll sell the puts to you when they’re available one week after IPO :)