Chapter
Robinhood's Arbitrage Pricing and Liquidity Issues
17:54 - 22:17 (04:23)
Robinhood makes money through arbitrage of pricing in the markets and by providing leverage, but they were exposed to losing money when spreads started to widen. Resolving their liquidity problem with a $1 billion investment, Robinhood faced criticism for preventing users from participating in trades due to an arbitrary decision.
Clips
The speaker questions the credibility of Vlad's statement as he has lied on multiple media outlets regarding a liquidity crisis.
17:54 - 18:14 (00:20)
Summary
The speaker questions the credibility of Vlad's statement as he has lied on multiple media outlets regarding a liquidity crisis.
ChapterRobinhood's Arbitrage Pricing and Liquidity Issues
EpisodeE19: Breaking down Robinhood's GameStop decision: Why did it happen and how can it be prevented in the future?
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Despite resolving their liquidity problem by drawing down $600 million and securing a billion-dollar investment from top investors, Robinhood still faced backlash for restricting trades during the GameStop frenzy.
18:14 - 19:48 (01:34)
Summary
Despite resolving their liquidity problem by drawing down $600 million and securing a billion-dollar investment from top investors, Robinhood still faced backlash for restricting trades during the GameStop frenzy. Some argue it was an arbitrary decision and prevented millions of hard-earned dollars from being traded elsewhere, but others see it as a necessary move to prevent insolvency.
ChapterRobinhood's Arbitrage Pricing and Liquidity Issues
EpisodeE19: Breaking down Robinhood's GameStop decision: Why did it happen and how can it be prevented in the future?
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Robinhood's business model relies on arbitrage pricing and providing leverage to their clients, but swings in the market expose them to losing money.
19:48 - 22:17 (02:29)
Summary
Robinhood's business model relies on arbitrage pricing and providing leverage to their clients, but swings in the market expose them to losing money. Their free pricing attracts customers during good times, but unstable market conditions can pose a risk to their business.