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I don't think there's a conspiracy, but I also don't think they get a free pass on this. They're going to lose much of their base, and they deserve to – if your

I don't think there's a conspiracy, but I also don't think they get a free pass on this. They're going to lose much of their base, and they deserve to – if your whole thing is retail traders, and everything stops working when it matters most, then people are going to look elsewhere. The CEO lied on TV about the reason, there's rumors that their investors asked them to stop it (I mean, they got $1Bn relief... of course it was at least a topic of conversation), and they make a ton of money ($100M/Q I've seen) from one of the big players in this (Citadel). I'm not saying there's a conspiracy, exactly... but I am saying when it came down to making hard choices, it doesn't take a full-blown conspiracy for them to make some of the decisions they made that erred on the side of benefiting institutional investors. All their cash (via both raising capital and selling data to funds) comes from institutional investors rather than average retail investors, and that was recently made clear to a lot of people.

sidibe 6y ago
"I don't think there's a conspiracy" followed by hints of conspiracy. I think Robinhood didn't do anything wrong (or even incompetent), but they are screwed because the prospect of losing money (actually just the potential of more money, they haven't lost any yet if they close now since the mania isn't done) is emotional and triggers outrage and a need for someone to blame.
- gkoberger 6y ago
  That's my point. I don't think there's a conspiracy, where the CEO of Wall Street called the Robinhood CEO and said "shut it down now" and they did. Rather, I think everyone acted in their own self-interest, and a lot of random retail investors found out that their best interests were the only ones that didn't align with everyone elses. A lack of a conspiracy doesn't mean the results were any different.
  - np- 6y ago
    IMO, it's similar to something like institutional racism. There probably are very few people who are openly and unashamedly racist at the highest levels of power (although sadly not zero) - but all it takes is the current players acting in their own self interest to keep perpetuating an extremely unfair and totally rigged system. Basically what MLK described in his Birmingham jail letter. (and to be clear, I think both of us are on the same page) But I would say - their underlying intentions are absolutely and totally irrelevant to the discussion. The only thing that matters is that they acted in a way that boosted Wall Street at the expense of retail traders, and thus they are perpetuating a corrupt system, whether they feel like they are or not.
    - vmception 6y ago
      > all it takes is the current players acting in their own self interest to keep perpetuating an extremely unfair and totally rigged system I’ll entertain this topic Lets take a yellow cab driver in Manhattan not wanting to pick up a black passenger. If you ask them, they’ll assume its because the black passenger lives in Brooklyn or some other not-Manhattan place and that the driver wont get a good tip and wont be able to get fares at the destination, making it less economical. The cotton and tobacco trade was also economical. Economics is never a good reason to make an exception for discrimination. But an individual may not have specific feelings about race, while they perpetuate a system of discrimination regardless. It still requires empathy to be able to relate to all parties in an articulate way, to see what needs to change to provide service and access to everyone. (To the person I replied to, there is nowhere that I’m disagreeing with you, in case you’ve been conditioned to look for that)
      - hooande 6y ago
        You have to solve this problem at a higher level. Why are black passengers more likely to live in poor and far away places? Obviously it will take time to resolve that. Generations at the least. But we have to do something in the mean time, or we'll be perpetuating the negative effects of social bias. We should change the short term economics using taxes and regulation as much as possible, while clearly telling people why we're doing that.
        vmception 6y ago
        Honestly, Lyft and Uber mostly solved that while being completely unrelated to that specific cause. It was a “UX problem” solved by a different program.
        lazyasciiart 6y ago
        Unfortunately, they don't appear to have solved it at all. https://www.theatlantic.com/business/archive/2016/10/uber-lyft-and-the-false-promise-of-fair-rides/506000/ https://www.theatlantic.com/business/archive/2016/10/uber-ly... https://www.bloomberg.com/news/articles/2019-11-22/ride-hail-racism-isn-t-gone-it-s-just-delayed https://www.bloomberg.com/news/articles/2019-11-22/ride-hail...
  - ac29 6y ago
    > Rather, I think everyone acted in their own self-interest Read the article. Robinhood arguably acted against their own interest, since they get paid for order flow (and telling customers they cant execute trades they'd like to make wont be good for customer retention either). Robinhood acted in a way that was contractually required, according to formulas set up long in advance of any of the latest market action.
    - np- 6y ago
      Sometimes you’re caught between a rock and a hard place. That doesn’t absolve you of the direct consequences of the actions you take. Perhaps a better question to ask is how did they allow themselves to end up in this position where they have absolutely no choice but to make a poor decision in the first place? Were there no adults at the wheel leading up to this? Is this not a sign of an entirely broken system?
      - sidibe 6y ago
        You are starting with the assumption they've been forced to do something wrong, I think you have to explain what that is first
        astrange 6y ago
        It’s about as wrong as grocery stores running out of a product to sell you.
        np- 6y ago
        All indications are that they promoted themselves as "democratizing finance" and being "for the people" (quotes are the exact words used by Robinhood to describe themselves). But as you mentioned, they were still contractually beholden to larger powers, and when push came to shove, they acted entirely within their own self interest. They lied to our face to gain business. Not only that, but they continue to lie to the media (not making it clear that this was a liquidity issue). Sure, in retrospect, it's evident that it was heading this way all along, but just because a fraud is perpetuated out in the open doesn't make it any less of a fraud.
- colllectorof 6y ago
  >I think Robinhood didn't do anything wrong (or even incompetent) Sure they did. The CEO of Robinhood went onto CNBC and lied about why they restricted trading. https://www.msn.com/en-us/money/companies/robinhoods-ceo-denies-the-trading-platform-is-facing-liquidity-issues-amid-investor-frenzy/ar-BB1dbB35 https://www.msn.com/en-us/money/companies/robinhoods-ceo-den... Also, here is their history of other recent fuckups: https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ "Robinhood Financial fined $65 million by SEC for misleading users" Stop making excuses for liars.
  - loceng 6y ago
    It's amazing to me there isn't a system that we can automatically pull from, of trusted channels, that will bring into view these more "hidden" narratives - that get crowded out by the current mainstream media and journalism trying to respond quickly without doing their homework or with doing more quick reads that keep to a narrow scope of a narrative instead of a longer read that requires attention, which in fact will quell the reader's excitement or over excitement - likely leading to less viral sharing due to losing readers who aren't patient enough to read more thorough content.
    - deleted 6y ago
      [deleted]
    - twothamendment 6y ago
      "It's amazing to me there isn't a system that we can automatically pull from, of trusted channels..." I like it, but who gets to decide which sources are trusted?
      - loceng 6y ago
        Whatever network(s) or leadership within the system you subscribe to.
      - adventured 6y ago
        The people visiting the service decide that for themselves; they decide if they think the provider is trustworthy. You personally have to trust the person / people deciding which sources on a matter/story are trustworthy. It's a chain. That trust gets built up over a long period of time ideally, starting typically from a very modest beginning. It's worth noting that sources are often not consistent, they can be trusted on one thing and then get another thing wrong, so it certainly won't be a simple matter of dictating that This Source is good and That Source is bad (for everything). More challenging than earning that initial trust, is maintaining it, not allowing a perversion to occur over time (where the service becomes biased, irrational). For every service that gains initial trust, most inevitably lose it over time; keeping it long-term is far harder.
- josephorjoe 6y ago
  Maybe (maybe...) they did nothing against the 'rules' but that's not going to help them much when their angry customers transfer their accounts to other brokerages. In my book, "really pissing off your customers" is "doing something wrong" which is why if you absolutely must do something that will make your customers angry you absolutely must explain yourself as quickly and as transparently as possible.
- pishpash 6y ago
  They did something wrong, like giving everyone a margin account without asking, when they didn't have enough capital to do so. It is in their business model that this would happen. They were just quite cavalier about it!
matwood 6y ago
> They're going to lose much of their base, and they deserve to Where are they going to go? Even with their problems, the RH app is pretty good - especially for the first time trader with a few hundred dollars. My primary brokers app and website works, but is very cumbersome. The closest thing out there might be ToS from when I used to use TDA.
- gkoberger 6y ago
  Hmm I've seen on r/wsb that many are going to Fidelity, while a few are trying weird apps like Webull. But maybe a better way to put it would be "they're going to lose the trust of much of their base", which might be fine short-term but long-term isn't great for them.
- freeone3000 6y ago
  IBRK has a great app, and API access so you can write your own frontend. The explanation of trades isn't as idiot-proof, though, and it won't let you trade options unless you complete a knowledge test.
  - jackson1442 6y ago
    > and it won't let you trade options unless you complete a knowledge test. This is honestly for the best, and is a feature I'm surprised Robinhood has not implemented.
    - megablast 6y ago
      The issue with robin hood has nothing to do with options. People were going long on stocks.
  - blueblisters 6y ago
    IBKR is great but they have fucked up before as well. When oil futures went negative early last year, IBKR's software could not handle a negative sign and led to traders not being able to close their positions. Luckily, IBKR took it to the chin and compensated more than $100 million in losses anything their clients owed below $0. Source: https://www.bloomberg.com/news/articles/2020-05-08/oil-crash-busted-a-broker-s-computers-and-inflicted-huge-losses https://www.bloomberg.com/news/articles/2020-05-08/oil-crash...
Spooky23 6y ago
It’s in Robinhood’s interest to speak in ways that indirectly support the conspiracy message. They don’t get implicated in the conspiracy statements, but benefit from attention seekers like the Barstool guy screaming and hand waving. That distracts from the pretty obvious reasons why Robinhood is an awful and dangerous business and business model. Now the mob is moving on to crypto and other scams, so the Robinhood PR strategy is perfectly executed and frankly, genius.
- fortran77 6y ago
  > Robinhood is an awful and dangerous business and business model. That's why I scratch my head over this. It's not difficult to open a Vanguard or Fidelity account and be able to get better pricing on retail trades, even if you're paying a little up-front for certain trades. Nobody who's trying to invest in the stock market can sincerely believe the Robinhood trades are "free." And Fidelity (for example) allows for other things that Robinhood can't. You can choose to lend your shares for shorts: From https://www.investopedia.com/fidelity-vs-robinhood-4587945 https://www.investopedia.com/fidelity-vs-robinhood-4587945 > Fidelity can also earn revenue loaning stocks in your account for short sales—with your permission, of course—and it shares that revenue with you. Fidelity tells us that for two months of lending certain hard to borrow securities, 38% of accounts earn $100 or less, another 37% earn between $100 and $1,000 and the remaining 25% earn over $1,000. Robinhood retains all the income it generates from loaning out customer stock and does not share it with the client.
  - Spooky23 6y ago
    They are just another discount broker, except they attract unsophisticated newcomers with growth hacker bullshit, accomplished by offering margin trading their customers don’t understand.
thr0waway2 6y ago
That's kind of how markets work though - when things are going most in your favour it's hardest to capitalise on it as price going your way means few people want to take the other side. And there's more things going into a price than just forecast of future prices - there's also liquidity, credit risk, operational issues, etc.
762236 6y ago
They get a free pass from me. They behaved as expected (thus predictably), and saved their company. There has to be a feedback loop that limits Robinhood's (and any company's) abilities to handle meme trades. I didn't need any explanation from the CEO, because what was happening was obvious to me (and I know nothing about finance --- only that money isn't free and that there has to be a feedback loop).
- op00to 6y ago
  What is a meme trade? How do you know?
dcolkitt 6y ago
> they make a ton of money ($100M/Q I've seen) from one of the big players in this (Citadel). No. Citadel Securities (the market maker) is a separate entity than Citadel Investments (the hedge fund). Citadel Securities is making money hand over fist from GME. As they always do during periods of high volume and volatility. Robinhood shutting down trading in GME almost certainly cost Citadel Securities a fortune in lost profits. Nor is there even any real evidence that Citadel the hedge fund has a very significant exposure to GME. For the entire month of January the main funds have only lost 1% in GME and 3% total.[1] Probably less in total than the amount Citadel Securities has made off the trading. [1]https://www.bloomberg.com/news/articles/2021-01-31/the-citadel-link-what-ken-griffin-has-to-do-with-gamestop https://www.bloomberg.com/news/articles/2021-01-31/the-citad...
- jrochkind1 6y ago
  There are two separate corporate entities, I understand they have the same ownership. https://en.wikipedia.org/wiki/Citadel_LLC https://en.wikipedia.org/wiki/Citadel_LLC
- markdown 6y ago
  > No. Citadel Securities (the market maker) is a separate entity than Citadel Investments (the hedge fund). I see this line trotted out a lot. Don't disrespect your fellow HN'ers. We're not fools. I have two balls, I can throw them both in whatever direction I want. I have two cars, I can have them driven where ever I want. I have two companies, I can make them do whatever I want. Citadel Sec and Citadel Inv represent the same people and have the same goal... to make as much money as possible for those people.
  - dcolkitt 6y ago
    There's a legal mandated Chinese firewall between the organizations. They have entirely different employees and reporting structures. If the two were coordinating, it would have to be a conspiracy involving dozens of people in different roles across the groups. Moreover, even if you assume that they didn't care about breaking the law and going to jail, it'd be stupid. Citadel Securities makes $6 billion a year.[1] Citadel's position in Gamestop represented a less than 1% loss to its hedge funds. At $35 billion AUM and 20% incentive fees, the impact of the Gamestop shorts on Citadel Investment's net income would be about $70 million. You're telling me that Citadel management decided to risk jail time and a $6 billion/year franchise to save $70 million? [1]https://www.bloomberg.com/news/articles/2021-01-22/citadel-securities-reaps-record-6-7-billion-year-on-volatility https://www.bloomberg.com/news/articles/2021-01-22/citadel-s... [2]https://www.bloomberg.com/news/articles/2021-01-31/the-citadel-link-what-ken-griffin-has-to-do-with-gamestop?srnd=premium https://www.bloomberg.com/news/articles/2021-01-31/the-citad...
grogenaut 6y ago
You don't need to think one way or another. There's a process called "Discovery" and we'll likely get to it and find out what happened. Or they'll settle and we won't find out. Given the number of class actions this will happen.

sidibe 6y ago

"I don't think there's a conspiracy" followed by hints of conspiracy. I think Robinhood didn't do anything wrong (or even incompetent), but they are screwed because the prospect of losing money (actually just the potential of more money, they haven't lost any yet if they close now since the mania isn't done) is emotional and triggers outrage and a need for someone to blame.

gkoberger 6y ago
That's my point. I don't think there's a conspiracy, where the CEO of Wall Street called the Robinhood CEO and said "shut it down now" and they did. Rather, I think everyone acted in their own self-interest, and a lot of random retail investors found out that their best interests were the only ones that didn't align with everyone elses. A lack of a conspiracy doesn't mean the results were any different.
- np- 6y ago
  IMO, it's similar to something like institutional racism. There probably are very few people who are openly and unashamedly racist at the highest levels of power (although sadly not zero) - but all it takes is the current players acting in their own self interest to keep perpetuating an extremely unfair and totally rigged system. Basically what MLK described in his Birmingham jail letter. (and to be clear, I think both of us are on the same page) But I would say - their underlying intentions are absolutely and totally irrelevant to the discussion. The only thing that matters is that they acted in a way that boosted Wall Street at the expense of retail traders, and thus they are perpetuating a corrupt system, whether they feel like they are or not.
  - vmception 6y ago
    > all it takes is the current players acting in their own self interest to keep perpetuating an extremely unfair and totally rigged system I’ll entertain this topic Lets take a yellow cab driver in Manhattan not wanting to pick up a black passenger. If you ask them, they’ll assume its because the black passenger lives in Brooklyn or some other not-Manhattan place and that the driver wont get a good tip and wont be able to get fares at the destination, making it less economical. The cotton and tobacco trade was also economical. Economics is never a good reason to make an exception for discrimination. But an individual may not have specific feelings about race, while they perpetuate a system of discrimination regardless. It still requires empathy to be able to relate to all parties in an articulate way, to see what needs to change to provide service and access to everyone. (To the person I replied to, there is nowhere that I’m disagreeing with you, in case you’ve been conditioned to look for that)
    - hooande 6y ago
      You have to solve this problem at a higher level. Why are black passengers more likely to live in poor and far away places? Obviously it will take time to resolve that. Generations at the least. But we have to do something in the mean time, or we'll be perpetuating the negative effects of social bias. We should change the short term economics using taxes and regulation as much as possible, while clearly telling people why we're doing that.
      - vmception 6y ago
        Honestly, Lyft and Uber mostly solved that while being completely unrelated to that specific cause. It was a “UX problem” solved by a different program.
        lazyasciiart 6y ago
        Unfortunately, they don't appear to have solved it at all. https://www.theatlantic.com/business/archive/2016/10/uber-lyft-and-the-false-promise-of-fair-rides/506000/ https://www.theatlantic.com/business/archive/2016/10/uber-ly... https://www.bloomberg.com/news/articles/2019-11-22/ride-hail-racism-isn-t-gone-it-s-just-delayed https://www.bloomberg.com/news/articles/2019-11-22/ride-hail...
- ac29 6y ago
  > Rather, I think everyone acted in their own self-interest Read the article. Robinhood arguably acted against their own interest, since they get paid for order flow (and telling customers they cant execute trades they'd like to make wont be good for customer retention either). Robinhood acted in a way that was contractually required, according to formulas set up long in advance of any of the latest market action.
  - np- 6y ago
    Sometimes you’re caught between a rock and a hard place. That doesn’t absolve you of the direct consequences of the actions you take. Perhaps a better question to ask is how did they allow themselves to end up in this position where they have absolutely no choice but to make a poor decision in the first place? Were there no adults at the wheel leading up to this? Is this not a sign of an entirely broken system?
    - sidibe 6y ago
      You are starting with the assumption they've been forced to do something wrong, I think you have to explain what that is first
      - astrange 6y ago
        It’s about as wrong as grocery stores running out of a product to sell you.
      - np- 6y ago
        All indications are that they promoted themselves as "democratizing finance" and being "for the people" (quotes are the exact words used by Robinhood to describe themselves). But as you mentioned, they were still contractually beholden to larger powers, and when push came to shove, they acted entirely within their own self interest. They lied to our face to gain business. Not only that, but they continue to lie to the media (not making it clear that this was a liquidity issue). Sure, in retrospect, it's evident that it was heading this way all along, but just because a fraud is perpetuated out in the open doesn't make it any less of a fraud.
colllectorof 6y ago
>I think Robinhood didn't do anything wrong (or even incompetent) Sure they did. The CEO of Robinhood went onto CNBC and lied about why they restricted trading. https://www.msn.com/en-us/money/companies/robinhoods-ceo-denies-the-trading-platform-is-facing-liquidity-issues-amid-investor-frenzy/ar-BB1dbB35 https://www.msn.com/en-us/money/companies/robinhoods-ceo-den... Also, here is their history of other recent fuckups: https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ "Robinhood Financial fined $65 million by SEC for misleading users" Stop making excuses for liars.
- loceng 6y ago
  It's amazing to me there isn't a system that we can automatically pull from, of trusted channels, that will bring into view these more "hidden" narratives - that get crowded out by the current mainstream media and journalism trying to respond quickly without doing their homework or with doing more quick reads that keep to a narrow scope of a narrative instead of a longer read that requires attention, which in fact will quell the reader's excitement or over excitement - likely leading to less viral sharing due to losing readers who aren't patient enough to read more thorough content.
  - deleted 6y ago
    [deleted]
  - twothamendment 6y ago
    "It's amazing to me there isn't a system that we can automatically pull from, of trusted channels..." I like it, but who gets to decide which sources are trusted?
    - loceng 6y ago
      Whatever network(s) or leadership within the system you subscribe to.
    - adventured 6y ago
      The people visiting the service decide that for themselves; they decide if they think the provider is trustworthy. You personally have to trust the person / people deciding which sources on a matter/story are trustworthy. It's a chain. That trust gets built up over a long period of time ideally, starting typically from a very modest beginning. It's worth noting that sources are often not consistent, they can be trusted on one thing and then get another thing wrong, so it certainly won't be a simple matter of dictating that This Source is good and That Source is bad (for everything). More challenging than earning that initial trust, is maintaining it, not allowing a perversion to occur over time (where the service becomes biased, irrational). For every service that gains initial trust, most inevitably lose it over time; keeping it long-term is far harder.
josephorjoe 6y ago
Maybe (maybe...) they did nothing against the 'rules' but that's not going to help them much when their angry customers transfer their accounts to other brokerages. In my book, "really pissing off your customers" is "doing something wrong" which is why if you absolutely must do something that will make your customers angry you absolutely must explain yourself as quickly and as transparently as possible.
pishpash 6y ago
They did something wrong, like giving everyone a margin account without asking, when they didn't have enough capital to do so. It is in their business model that this would happen. They were just quite cavalier about it!

matwood 6y ago

> They're going to lose much of their base, and they deserve to Where are they going to go? Even with their problems, the RH app is pretty good - especially for the first time trader with a few hundred dollars. My primary brokers app and website works, but is very cumbersome. The closest thing out there might be ToS from when I used to use TDA.

gkoberger 6y ago
Hmm I've seen on r/wsb that many are going to Fidelity, while a few are trying weird apps like Webull. But maybe a better way to put it would be "they're going to lose the trust of much of their base", which might be fine short-term but long-term isn't great for them.
freeone3000 6y ago
IBRK has a great app, and API access so you can write your own frontend. The explanation of trades isn't as idiot-proof, though, and it won't let you trade options unless you complete a knowledge test.
- jackson1442 6y ago
  > and it won't let you trade options unless you complete a knowledge test. This is honestly for the best, and is a feature I'm surprised Robinhood has not implemented.
  - megablast 6y ago
    The issue with robin hood has nothing to do with options. People were going long on stocks.
- blueblisters 6y ago
  IBKR is great but they have fucked up before as well. When oil futures went negative early last year, IBKR's software could not handle a negative sign and led to traders not being able to close their positions. Luckily, IBKR took it to the chin and compensated more than $100 million in losses anything their clients owed below $0. Source: https://www.bloomberg.com/news/articles/2020-05-08/oil-crash-busted-a-broker-s-computers-and-inflicted-huge-losses https://www.bloomberg.com/news/articles/2020-05-08/oil-crash...

Spooky23 6y ago

It’s in Robinhood’s interest to speak in ways that indirectly support the conspiracy message. They don’t get implicated in the conspiracy statements, but benefit from attention seekers like the Barstool guy screaming and hand waving. That distracts from the pretty obvious reasons why Robinhood is an awful and dangerous business and business model. Now the mob is moving on to crypto and other scams, so the Robinhood PR strategy is perfectly executed and frankly, genius.

fortran77 6y ago
> Robinhood is an awful and dangerous business and business model. That's why I scratch my head over this. It's not difficult to open a Vanguard or Fidelity account and be able to get better pricing on retail trades, even if you're paying a little up-front for certain trades. Nobody who's trying to invest in the stock market can sincerely believe the Robinhood trades are "free." And Fidelity (for example) allows for other things that Robinhood can't. You can choose to lend your shares for shorts: From https://www.investopedia.com/fidelity-vs-robinhood-4587945 https://www.investopedia.com/fidelity-vs-robinhood-4587945 > Fidelity can also earn revenue loaning stocks in your account for short sales—with your permission, of course—and it shares that revenue with you. Fidelity tells us that for two months of lending certain hard to borrow securities, 38% of accounts earn $100 or less, another 37% earn between $100 and $1,000 and the remaining 25% earn over $1,000. Robinhood retains all the income it generates from loaning out customer stock and does not share it with the client.
- Spooky23 6y ago
  They are just another discount broker, except they attract unsophisticated newcomers with growth hacker bullshit, accomplished by offering margin trading their customers don’t understand.

thr0waway2 6y ago

That's kind of how markets work though - when things are going most in your favour it's hardest to capitalise on it as price going your way means few people want to take the other side. And there's more things going into a price than just forecast of future prices - there's also liquidity, credit risk, operational issues, etc.

762236 6y ago

They get a free pass from me. They behaved as expected (thus predictably), and saved their company. There has to be a feedback loop that limits Robinhood's (and any company's) abilities to handle meme trades. I didn't need any explanation from the CEO, because what was happening was obvious to me (and I know nothing about finance --- only that money isn't free and that there has to be a feedback loop).

op00to 6y ago
What is a meme trade? How do you know?

dcolkitt 6y ago

> they make a ton of money ($100M/Q I've seen) from one of the big players in this (Citadel). No. Citadel Securities (the market maker) is a separate entity than Citadel Investments (the hedge fund). Citadel Securities is making money hand over fist from GME. As they always do during periods of high volume and volatility. Robinhood shutting down trading in GME almost certainly cost Citadel Securities a fortune in lost profits. Nor is there even any real evidence that Citadel the hedge fund has a very significant exposure to GME. For the entire month of January the main funds have only lost 1% in GME and 3% total.[1] Probably less in total than the amount Citadel Securities has made off the trading. [1]https://www.bloomberg.com/news/articles/2021-01-31/the-citadel-link-what-ken-griffin-has-to-do-with-gamestop https://www.bloomberg.com/news/articles/2021-01-31/the-citad...

jrochkind1 6y ago
There are two separate corporate entities, I understand they have the same ownership. https://en.wikipedia.org/wiki/Citadel_LLC https://en.wikipedia.org/wiki/Citadel_LLC
markdown 6y ago
> No. Citadel Securities (the market maker) is a separate entity than Citadel Investments (the hedge fund). I see this line trotted out a lot. Don't disrespect your fellow HN'ers. We're not fools. I have two balls, I can throw them both in whatever direction I want. I have two cars, I can have them driven where ever I want. I have two companies, I can make them do whatever I want. Citadel Sec and Citadel Inv represent the same people and have the same goal... to make as much money as possible for those people.
- dcolkitt 6y ago
  There's a legal mandated Chinese firewall between the organizations. They have entirely different employees and reporting structures. If the two were coordinating, it would have to be a conspiracy involving dozens of people in different roles across the groups. Moreover, even if you assume that they didn't care about breaking the law and going to jail, it'd be stupid. Citadel Securities makes $6 billion a year.[1] Citadel's position in Gamestop represented a less than 1% loss to its hedge funds. At $35 billion AUM and 20% incentive fees, the impact of the Gamestop shorts on Citadel Investment's net income would be about $70 million. You're telling me that Citadel management decided to risk jail time and a $6 billion/year franchise to save $70 million? [1]https://www.bloomberg.com/news/articles/2021-01-22/citadel-securities-reaps-record-6-7-billion-year-on-volatility https://www.bloomberg.com/news/articles/2021-01-22/citadel-s... [2]https://www.bloomberg.com/news/articles/2021-01-31/the-citadel-link-what-ken-griffin-has-to-do-with-gamestop?srnd=premium https://www.bloomberg.com/news/articles/2021-01-31/the-citad...

grogenaut 6y ago

You don't need to think one way or another. There's a process called "Discovery" and we'll likely get to it and find out what happened. Or they'll settle and we won't find out. Given the number of class actions this will happen.