5 ms·
Melvin received $2.75 billion in funding from Citadel/Point72 to cover it's failed short positions. You are telling me there is nothing RH could do to cover th
by nightski 6y ago
Melvin received $2.75 billion in funding from Citadel/Point72 to cover it's failed short positions.
You are telling me there is nothing RH could do to cover the collateral?
This is what has me slightly skeptical. Seems like the bailouts are no problem when it comes to the major players but liquidity for plebs? Nah.
- majormajor 6y agoRH also raised a billion https://www.nytimes.com/2021/01/29/technology/robinhood-fundraising.html https://www.nytimes.com/2021/01/29/technology/robinhood-fund... I highly doubt either of those transactions happened at the press of a button, though. We just didn't see whatever behind the scenes drama occurred at Melvin.
- valuearb 6y agoRobinhood is not Melvin, different companies have different net asset based and borrowing ability. Melvin was also bailed out by Stephen Cohen, who the Melvin founder worked for. Cohen likely believed in the founder and already knew enough about their positions to be able to make such a huge investment in such a short time frame. Equity investments typically take too much time to complete due diligence when your firm is drowning in a hurricane. Robinhood was rumored to have tapped all their available credit lines for $1B before they ran out of cash. I suspect we will read about an equity infusion in the next few weeks, if they make it that long.