Shortly after Robinhood folded on its earlier decision to block buying of several high-profile stocks, Bloomberg reports the company has drawn down some of its credit lines with banks.
According to people with knowledge of the matter, Bloomberg reports that the firm has tapped at least several hundred million dollars, one of the people said.
Lenders include JPMorgan Chase & Co. and Goldman Sachs Group Inc.
So, perhaps we were right when we noted below the real reason is a sudden liquidity crisis as fees from Citadel evaporates as flows disappeared.
This could be an existential threat to the popular trading app, as one questions the sanity of people who would stay with the firm after today’s betrayal knowing they are reportedly facing liquidity issues.