- Robinhood raised $ 1 billion from existing investors this week.
- The trading platform is struggling with an increase in trading of some stocks, including GameStop.
- Earlier Thursday, the firm also borrowed several hundred million dollars from banks.
- Visit Business Insider’s homepage for more stories.
Robinhood raised $ 1 billion from its existing investors this week, reports The New York Times.
The company is struggling to cope with an increase in trading on the platform, with a number of stocks targeting short press, mainly driven by the WallStreetBets Reddit forum, a group of retailers that share prices of GameStop and AMC Theaters , amongst other things.
Robinhood CEO Vlad Tenev said Thursday that the company has no liquidity issues after Bloomberg reported that the firm had borrowed “at least a few hundred million dollars” amid the chaos in the trade.
Read more: How hedge funds are monitoring Reddit posts to protect their portfolios after the crowd at Wall Street Bets helped clear the short positions of Melvin Capital
The trading platform also temporarily halted purchases of certain shares, which upset lawmakers and business leaders.
In an email sent to Robinhood users on Thursday, the company said that limited purchases of these shares would be allowed on Friday, but that it would continue to “monitor the situation and make adjustments if necessary.”
“To be clear, the decision was not made about the direction of any market maker we are going to or other market participants,” the statement continued.
Robinhood needed even more cash to implement further trade restrictions, two sources told The Times.
The investors of the private company include the venture capital firms Sequoia Capital and Rabbit Capital, both of which provided additional financing on Thursday, reports The Times.
“This is a strong sign of investor confidence that will help us continue to serve our clients,” a Robinhood spokesman told The Times.
On Thursday, a dozen Republicans from the House sent a letter to the head of the Securities and Exchange Commission asking him to investigate possible collusion between Robinhood and any hedge fund.