[tptacek]

Yes: Robinhood runs a casino dressed up as a brokerage, and packaged their offering as if settlement was instantaneous, rather than an efficient fiction built out of loans extended to everyone involved in settling a stock transaction. Brokerages put up substantial capital to insure themselves from each other based on how their customers are extending themselves; there are published formulas for how these capital calls work. Robinhood did their best to hide this reality from their customers, and got caught out.

Nobody should be defending Robinhood here. People are just wrong about what Robinhood did wrong.

[oakwhiz]

There are actually supporting claims for this theory from investors on Reddit who transferred "meme stocks" out of Robinhood and noticed wildly incorrect cost basis reports on fractional shares, with some screenshots showing values into the thousands of dollars per share. These posts could be found on subreddits such as Wall Street Bets, Superstonk, etc., for example: https://www.reddit.com/r/Superstonk/comments/ngs81d/just_got...

[gruez]

what is "this theory" and how do wrong cost basis statements support that theory? Is it that hard to make fake cost basis statements or something?

[oakwhiz]

"This theory" is the theory that "Robinhood runs a casino dressed up as a brokerage, and packaged their offering as if settlement was instantaneous, rather than an efficient fiction built out of loans extended to everyone involved in settling a stock transaction."