3 ms·
"I watched the CEO on CNN tonight, and while I found him pretty difficult to watch, this is a very difficult position to be in. If you admit on TV that your com
by zoobab 6y ago
"I watched the CEO on CNN tonight, and while I found him pretty difficult to watch, this is a very difficult position to be in. If you admit on TV that your company is experiencing liquidity issues -- even if temporary in nature such as with clearing custodianship requirements -- you run the risk of triggering a greater panic through customer withdrawals/redemptions."
A Bankrun!
- shadowgovt 6y agoThe key difference is that Robinhood isn't a bank. Bank runs are bad because banks are assumed to be massively liquid---in the average case, if you walk in and provide the proper ID, they can hand you the cash you're asking for. If they can't, one of their primary value propositions is at risk and people start demanding their money out because the bank isn't able to provide the services of a bank. This is not (and is not expected to be) true of stock brokerage. Nobody generally has an expectation of moment-to-moment liquidity (or even closure of deals), even in a stock with significant availability. However, a brokerage deciding independently "You're not allowed to buy this one stock" is unusual, and can cause people to start backing towards the exits.