[michaelgrosner2]

In a way I sympathize with RH. If they were truthful that they didn't have enough money, they would have had to publicly admit they couldn't cover the purchases, which could have led to a run on them and everyone pulling out of Robinhood at once. In some ways, pulling the buy button was the best option they had. Too bad they didn't account for the fact that it would spawn a thousand conspiracy theories.

[cco]

I do as well to a degree, in fact those clearing houses turned the absolute _screws_ to Robinhood, increasing the collateral requirements quite above and beyond what is normal. Robinhood was stuck between a rock and a hard place, squeezed from both sides, but unfortunately they chose to stay "silent" and stonewall their users, the wrong move imo.

They had an opportunity to rail at the system and cast themselves as the vanguard and champion of their users's rights. They were doing everything they could to cover the collateral obligations, but the big bad clearing houses and various market makers were dead set at dousing a bit of water on the fire. Instead they kept to the line, "There is no liquidity problem", which was a bald faced lie to protect against a run and/or loss of faith as you point out.

If there was any lesson to take from GME/meme stocks, "lack of faith" due to poor fundamentals is not a problem haha. Users would have LOVED Robinhood more if they perceived them as helping them fight "the power". But they chose not to and anecdotally any of my friends that were caught up cooled considerably on Robinhood, I don't know a single of my dozen or so acquaintances still using it fearing that Robinhood will fail them when it is critical.

[lovecg]

It’s the classic “do you lie or do you cause a stampede” dilemma. Similar to the masks shortage debacle in the early pandemic.