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Suppose you're right. How do you explain the $1B loan Robinhood took out?
by pmiller2 6y ago
Suppose you're right. How do you explain the $1B loan Robinhood took out?
- rdiddly 6y agoTaking out a loan, in itself, doesn't indicate insolvency. If it did, nobody would lend, ever. Now defaulting on a loan - that does indicate insolvency.
- valuearb 6y agoYou are correct. But an emergency loan indicates increased risk of insolvency. Robinhood isn’t going to borrow money they don’t need, and raise their interest costs. Likely the loans were preexisting credit lines, so they were obligated to find Robinhood upon request. The question is whether it will be enough and if not, whether new loans or investment will be available. Sitting on the outside it’s impossible to know whether this is an eminently comfortable buffer or a last finger in the dike.