Popular trading platform Robinhood has raised over $1 billion in emergency funds in order to cope with the extraordinarily high number of trades this week, a spokesperson told Forbes, as a Reddit-informed army of retail investors pour into heavily shorted stocks like GameStop, Blockbuster, AMC and BlackBerry.
The brokerage raised $1 billion from existing investors, who the Times report will receive “Additional equity in the company”, as well as several hundred million from bank credit lines.
A Robinhood spokesperson confirmed the New York Times report that it had raised over $1 billion from existing investors, telling Forbes that “This is a strong sign of confidence from investors that will help us continue to further serve our customers.”
“Limited” trading of meme stocks – including GameStop, AMC Entertainment, BlackBerry and Bed Bath & Beyond – will resume Friday, Robinhood said.
Armies of retail investors, many informed by forums like Reddit’s r/WallStreetBets, have helped drive up the stock of struggling companies like GameStop, AMC, BlackBerry and even Blockbuster, spurring massive losses for the hedge funds who had shorted the stocks.