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I wonder if Robinhood is preparing for the possibility that its margin book gets blown up when GME inevitably crashes. Crashing price creates cascading margin c

I wonder if Robinhood is preparing for the possibility that its margin book gets blown up when GME inevitably crashes. Crashing price creates cascading margin calls and they can't liquidate their customers' positions fast enough and end up having to cover their losses, rendering them insolvent. Sequoia, thinking that the fundamentals of the company are still solid long term and that they can wash their hands of this in an IPO in the near future, extends them a lifeline at absolutely brutal terms.

pishpash 6y ago
Did their customers all buy on margin?
- jeremycarter 6y ago
  I believe you can also increase your leverage. https://learn.robinhood.com/articles/4UWpxUy5G0KNDSbcMRs6WE/what-is-leverage/ https://learn.robinhood.com/articles/4UWpxUy5G0KNDSbcMRs6WE/...
ccmcarey 6y ago
RH are closing out some margin calls to decrease the risk of this happening afaik.
Tenoke 6y ago
They already liquidated everything on margin yesterday without giving users any choice or warning. It was part of what caused the drop in combination with the no buying.