This obscure part of the market is making Reddit trade harder
Robinhood Markets has had discussions with banks about raising another US$1 billion of debt as the stock brokerage app grapples to keep filling orders amid a Reddit-fueled trading mania focused on heavily shorted stocks, Reuters reported.
Any fresh capital would be separate from the US$3.4 billion that’s been raised by the firm in the past few days, including US$2.4 billion announced Monday, the news organization reported, citing people that it didn’t name.
The company’s biggest backers have been plowing money into the brokerage at an unprecedented pace as the brokerage faces outraged customers, increased regulatory scrutiny and questions about its plans for an initial public offering.
Robinhood started negotiations with banks about expanding its lines of credit or arranging a new one after it drained its revolving debt facility during last week’s frenetic trading, Reuters said, citing one of its sources, who it said asked not to be identified because the matter is confidential. Robinhood declined to comment to Reuters. A representative for the company didn’t immediately respond to Bloomberg News when asked to comment.