4 ms·

Robinhood is in a tough position. Retail is going crazy for the stock because it seems like everyone else is, and is clearly not based on fundamentals. But what

Robinhood is in a tough position. Retail is going crazy for the stock because it seems like everyone else is, and is clearly not based on fundamentals. But what can Robinhood do? It’s possible the huge institutional shareholders have sold off their positions to main st and now they will get stuck holding the bag. Fidelity and Blackrock might have made $10B each from this runup while selling to these buyers. Most folks will have huge losses. The WSB narrative is that it’s Melvin capital holding all of those short shares, and they want to stick it to them. But we don’t really know how many shares they actually hold, surely they aren’t 100% of the short interest. It will be very interesting once all this unwinds and we see who was holding what.

sauwan 6y ago
Why is RH in a tough position? They're a market maker, not a market controller. This should just be a reminder to everyone that if you're getting commission free trades, you're not the customer and your interests come after the real customers.
mathgenius 6y ago
Yeah, RH could legitimately be trying to protect their users from what is basically a pump & dump scheme. Alternatively, they could be having liquidity troubles, or backend trouble, etc. If you are serious about trading you should not be on RH...
- happytoexplain 6y ago
  >If you are serious about trading you should not be on RH While basically true, this isn't a reasonable excuse to shift blame from RH to their users.
- throwaway2245 6y ago
  > RH could legitimately be trying to protect their users from what is basically a pump & dump scheme Considering that RH's business model has benefited from getting people excited about gambling on volatile stocks, I highly doubt they would be motivated to protect their customers from pump & dump.
happytoexplain 6y ago
>what can Robinhood do? Simply link the user to relevant news, as they have always done.

sauwan 6y ago

Why is RH in a tough position? They're a market maker, not a market controller. This should just be a reminder to everyone that if you're getting commission free trades, you're not the customer and your interests come after the real customers.

mathgenius 6y ago

Yeah, RH could legitimately be trying to protect their users from what is basically a pump & dump scheme. Alternatively, they could be having liquidity troubles, or backend trouble, etc. If you are serious about trading you should not be on RH...

happytoexplain 6y ago
>If you are serious about trading you should not be on RH While basically true, this isn't a reasonable excuse to shift blame from RH to their users.
throwaway2245 6y ago
> RH could legitimately be trying to protect their users from what is basically a pump & dump scheme Considering that RH's business model has benefited from getting people excited about gambling on volatile stocks, I highly doubt they would be motivated to protect their customers from pump & dump.

happytoexplain 6y ago

>what can Robinhood do? Simply link the user to relevant news, as they have always done.