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If this is ahead of schedule it makes me wonder if they're dumping risk from the recent GME et al fiasco onto the public market - or they're fast tracking it be

by loceng 6y ago

If this is ahead of schedule it makes me wonder if they're dumping risk from the recent GME et al fiasco onto the public market - or they're fast tracking it because they need more billions to cover unexpected costs due to GME et al?

vmception 6y ago
Although it almost never is the specific purpose, it is always also a purpose. An exit is an exit, a liquidity event is a liquidity event. De-risking means being able to support your lifestyle no matter what happens, so this does that regardless of whatever quantum states of adversity could lurk behind the scenes.
CapriciousCptl 6y ago
My bet is the latter. GME exposed how undercapitalized they were given their customers’ leverage and existing investors probably aren’t interested in/can’t agree on terms for injecting more cash themselves. Probably, you wouldn’t intentionally IPO immediately after a PR disaster unless you had too. I really really hope the SEC makes them disclose all the gory details of their “payment for order flow” stuff. I mean, basically, smart people who write about it (Levine, patio11), say it’s harmless/helpful. But I don’t think it sits right with anyone. Certainly not with me .
- freeone3000 6y ago
  Short story is, they're making money you don't have access to. Exchanges add fees to every trade that goes through an exchange. If a stock costs $10 with a $1 fee, and someone's willing to sell it to you for $10.50 with a $0 fee, wouldn't you take it? That's fifty cents of price improvement over national best offer. So Citadel batches all the orders for that stock and does one big trade (per stock) at the end of the day, and everything settles out -- you got cheaper stock, they made some money for their trouble. Enough money to kick back $0.20 or so to Robinhood for referring you as a client.
- basseq 6y ago
  > GME exposed how undercapitalized they were... Or, more accurately, the extreme volatility of GME led to increased collateral requirements that Robinhood couldn't meet. (It was like billions of dollars, iirc.) Or, otherwise, it's not that Robinhood was undercapitalized (or even is undercapitalized!)—just that the goalposts moved suddenly and unexpectedly. PFOF is still a little squirrel-y. Ditto on Levine and others, and tied up in all that T+2 settlement issue, too.
  - CapriciousCptl 6y ago
    I think most people would equate "not meeting collateral requirements" to being undercapitalized.

by loceng 6y ago

vmception 6y ago

Although it almost never is the specific purpose, it is always also a purpose. An exit is an exit, a liquidity event is a liquidity event. De-risking means being able to support your lifestyle no matter what happens, so this does that regardless of whatever quantum states of adversity could lurk behind the scenes.

CapriciousCptl 6y ago

My bet is the latter. GME exposed how undercapitalized they were given their customers’ leverage and existing investors probably aren’t interested in/can’t agree on terms for injecting more cash themselves. Probably, you wouldn’t intentionally IPO immediately after a PR disaster unless you had too. I really really hope the SEC makes them disclose all the gory details of their “payment for order flow” stuff. I mean, basically, smart people who write about it (Levine, patio11), say it’s harmless/helpful. But I don’t think it sits right with anyone. Certainly not with me .

freeone3000 6y ago
Short story is, they're making money you don't have access to. Exchanges add fees to every trade that goes through an exchange. If a stock costs $10 with a $1 fee, and someone's willing to sell it to you for $10.50 with a $0 fee, wouldn't you take it? That's fifty cents of price improvement over national best offer. So Citadel batches all the orders for that stock and does one big trade (per stock) at the end of the day, and everything settles out -- you got cheaper stock, they made some money for their trouble. Enough money to kick back $0.20 or so to Robinhood for referring you as a client.
basseq 6y ago
> GME exposed how undercapitalized they were... Or, more accurately, the extreme volatility of GME led to increased collateral requirements that Robinhood couldn't meet. (It was like billions of dollars, iirc.) Or, otherwise, it's not that Robinhood was undercapitalized (or even is undercapitalized!)—just that the goalposts moved suddenly and unexpectedly. PFOF is still a little squirrel-y. Ditto on Levine and others, and tied up in all that T+2 settlement issue, too.
- CapriciousCptl 6y ago
  I think most people would equate "not meeting collateral requirements" to being undercapitalized.