Robinhood raised $1 billion from existinginvestors this week.- The
trading platform is struggling with a surge in trading of some stocks, includingGameStop . - Earlier Thursday, the firm also borrowed "several hundred million dollars" from banks.
Robinhood raised $1 billion from its existing investors this week, The New York Times reported.
The firm is struggling to handle a surge in trading on the platform involving a number of stocks that have been the target of short squeezes, driven largely by the $4 Reddit forum, a group of retail traders that helped drive up the share prices of GameStop and AMC Theaters, among others.
Robinhood CEO Vlad Tenev said Thursday that the $4, after Bloomberg reported that the firm had borrowed "at least several hundred million dollars" from banks amid the trading chaos.
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The trading platform also temporarily $4, sparking outrage from lawmakers and business leaders.
In an email sent to Robinhood users on Thursday, the company said limited purchases of those stocks would be allowed on Friday, but that it would continue to "monitor the situation and may make adjustments as needed."
"To be clear, the decision was not made on the direction of any market maker we route to or other market participants," the statement continued.
Robinhood was still in need of more cash to avoid implementing further trading restrictions, two sources told The Times.
The privately-held company's investors include
"This is a strong sign of confidence from investors that will help us continue to further serve our customers," a spokesperson for Robinhood, told The Times.
On Thursday a dozen House Republicans sent a letter to the head of the Securities and Exchange Commission calling on it to investigate possible collusion between Robinhood and any hedge funds.