So I'd say the truth came out in an interview late Sunday evening between Elon Musk and Robinhood CEO Vlad Tenev. [1] > Tenev explained that while he was sleep

So I'd say the truth came out in an interview late Sunday evening between Elon Musk and Robinhood CEO Vlad Tenev. [1] > Tenev explained that while he was sleeping, at 3:30 a.m. PT on Thursday, Robinhood's operations team received a file from the National Securities Clearing Corporation (NSCC) that as a clearing broker, Robinhood Securities needed to put up around $3 billion "an order of magnitude more than what it typically is." > So, it was unprecedented activity. I don't have the full context about what was going on, what's going on in the NSCC to make these calculations," Tenev added — prompting Musk to joke if someone was “holding you hostage right now.” > Tenev said that after putting their heads together and calling the higher-ups at the NSCC, they got that figure down to $1.4 billion, from the initial $3 billion. "We were making some progress, right, but still a higher number," he added. > Next, Tenev said they had to explain how to "manage risk in these symbols" by restricting activity in the volatile stocks. After that, the NSCC said the charges on the deposit were $700 million, which Robinhood "paid promptly." You don't even have to read between the lines here. Robinhood isn't the problem here. Massive long retail demand is crushing shorts, which is potentially opening the clearing houses to multi-billion dollar losses. The way to stem the losses is to stem buying pressure and get the stock to come down. So call up Robinhood and demand $3 billion in collateral (an order of magnitude higher than the day before) unless they stop the buying pressure on the shares. When Robinhood agreed to limit buying, the NSCC was willing to drop the collateral requirement to $700 million. This isn't about a share-for-share clearing / transaction cost for each buy order entered. Those buy orders are cash funded and zero risk for Robinhood and zero risk to NSCC / DTCC. This is about extorting Robinhood to stave off the bankruptcy and subsequent contagion of a 140% short interest on a stock that's gone up 70x in just a few months. Look, I agree that Robinhood can't use customer funds to pay extortion demands from the clearing houses. My point is that Robinhood clearing fully cash-paid buy orders does not incur additional clearing costs to Robinhood. It's not a per-order transaction fee. It's a slush fund which is used to pad against defaults. > "Now, why is that so high? Like this seems like, it sounds like an unprecedented increase in demand for capital. What formula did they use to calculate that?" Musk asked. > To contextualize the number, the app's CEO noted that RobinHood had raised about $2 billion in total venture funding. He added that the formula was “not fully transparent” and “not publicly shared.” [1] - https://www.msn.com/en-us/money/savingandinvesting/spill-the-beans-man-tesla-s-elon-musk-grills-robinhood-ceo-on-gamestop-reddit-trading-saga/ar-BB1dhLcZ?ocid=msedgntp https://www.msn.com/en-us/money/savingandinvesting/spill-the...