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Robinhood Markets Inc. has raised an additional $ 2.4 billion from shareholders, days after investors agreed to inject $ 1 billion into online brokerage to help it weather a trading frenzy in popular stocks , including GameStop Inc.
The huge infusion – the $ 3.4 billion raised since last Thursday is more than what the company has raised in total so far – gives Robinhood a war chest to cover an increase in collateral requirements resulting from the business boom, people said. It should also allow the company to take over the hundreds of thousands of new accounts users have opened since Thursday and remove many of the trading restrictions that have angered clients of the popular brokerage, the people said.
The fundraising operation was structured as a note that gives the option to buy additional shares at a discount later, the people said.
Traders have inundated Robinhood with buy and sell orders for a handful of popular stocks over the past week. The sharp fluctuations in the value of these shares have prompted the clearinghouse that processes and settles the transactions to request more liquidity to cover potential losses on the transactions.
In an interview posted online Sunday evening, Robinhood chief executive Vlad Tenev said the clearinghouse initially requested $ 3 billion to back up trades – “about an order of magnitude larger than it is. usually”. He spoke Sunday night in an interview alongside Tesla Inc. boss Elon Musk on a live broadcast from Clubhouse, an invite-only social networking app popular in Silicon Valley.
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