Robinhood Raises Another $2.4 Billion From Shareholders – The Wall Street Journal

Robinhood Markets Inc. raised another $2.4 billion from shareholders, days after investors agreed to pump $1 billion into the online brokerage to help it ride out a trading frenzy in popular stocks including GameStop Inc.

The huge infusion—the $3.4 billion raised since last Thursday is more than the company has raised in total up until this point in the eight years since its launch—gives Robinhood a war chest to cover a surge in collateral requirements stemming from the trading boom, people familiar with the matter said. It also should allow the company to support the hundreds of thousands of new accounts users opened since Thursday and to remove many of the trading restrictions that angered customers of the popular brokerage, the people said.

The fundraising deal was structured as a note that conveys the option to buy additional shares at a discount later, the people said.

Customers flooded Robinhood and other brokerages with orders to buy and sell a handful of popular stocks last week. GameStop, the stock that kicked off the retail surge, closed Friday at $325. It began the year at under $20. AMC Entertainment Holdings Inc., the battered movie-theater chain, is up more than 500% in 2021.

The wild price swings prompted the clearinghouse that processes and settles the trades to ask for more cash to cover potential losses on the transactions.