Consumer investing app Robinhood has raised new capital. The new funds total more than $1 billion, with the company disclosing that they were raised from its existing investor base.
The New York Times reports that the company raised the new equity capital after tapping its credit lines for $500 to $600 million.;
The reported drawdown matches reporting from yesterday indicating that Robinhood had accessed nine-figures of capital to ensure it had enough funds on hand to meet regulatory minimums and other requirements related to its users’ trading activity.
Individual retail investors, along with institutional capital, have attacked short positions in some stocks in recent weeks, leading to a tug-of-war between bullish investors and bearish wagers; the resulting tumult led to surging volume for volatile stocks, leading to Robinhood needing more capital to keep its gears turning.
The unicorn consumer fintech company halted trading in stocks like GameStop that had become the center of the trading storm yesterday, leading to frenetic accusations from incensed users that something nefarious was afoot. Later in the day the clearing house entity powering trading for other consumer trading services also halted service for a similar set of stocks.
Robinhood told users that it would allow trading to begin in some fashion today in shares it had previously restricted.
It does not appear that the current trading scrap will abate soon. Shares of GameStop, the most famous so-called “meme stock” in the current trading war, is up just under 94% this morning in pre-market trading, implying that many investors are willing to continue pushing its value higher in hopes of breaking short bets laid by other investors.