- “Despite some positive and negative press, everyone in the world knows who Robinhood is. They couldn’t have better free advertising.”
- Depository Trust Company (DTCC) requires Robinhood to invest more cash to insure Able to settle transactions.
- US stock trading is witnessing unprecedented growth, which has made many people believe that the US stock market has hit its highest level ever.
Foreign media quoted news reports that Robinhood, a US stock trading platform, plans to secretly submit an IPO application as early as next month and negotiate with the underwriters in the past week. In last year’s round of financing, the company was valued at $11.7 billion. It is reported that Robinhood started planning for an IPO this year at least last year.
“From a brand recognition perspective, who doesn’t know who Robinhood is?” said Greg Martin, managing director and co-owner at Rainmaker Securities. “Despite some positive and negative press, everyone in the world knows who Robinhood is. They couldn’t have better free advertising.”
According to reports, Robinhood is facing a shortage of funds. As retail investors rush to stocks like video game distributor GameStop and theater chain AMC, the price of related shares fluctuates sharply.
The intermediary settlement agency Depository Trust Company (DTCC) requires Robinhood to invest more cash to insure Able to settle transactions. Robinhood had to use a line of credit to raise $3.4 billion to provide more collateral to DTCC.
“With the amount of capital they now have, I expect the company will be the dominant brokerage going forward, and I think the market will acknowledge that,” said Martin, who is also the founder of Liquid Stock. “The valuation could be very large in the very near future which bodes well for an IPO.”
In addition, Robinhood also has regulatory issues. The company said that the U.S. Securities and Exchange Commission (SEC) is investigating its restrictions on the trading of shares such as GameStop in January.
US stock trading is witnessing unprecedented growth, which has made many people believe that the US stock market has hit its highest level ever. The government stimulus package implemented by the US Federal government during the recession period has helped the US economy in generating a surplus income for the American people.
This fiscal policy or fiscal management plan has helped the US economy by infusing millions of dollars into the economy and infusing it in different sectors, including infrastructure, research, and development, infrastructure and commerce, etc. As a result, US stock markets have benefited from this inflow of funds.
However, the inflow of money was not enough. US stock market investors had to bear a lot of losses. In fact, during the whole recession period, the US stock market suffered from heavy losses. So, it was essential for the US authorities to come out with some fiscal policies that would help restore the lost confidence of investors in US stocks. This they did by rescuing major financial institutions, pushing back the index prices, and opening up a new mortgage-backed securities market.
US stock markets are witnessing an unprecedented surge in the number of buyers. In addition to that, there is a significant increment in the number of sellers too. As a result, the liquidity of stocks also increased which further augmented liquidity in the markets. This has been one of the main reasons behind the stock-market crash.
However, all this does not mean that the US stock market is headed towards an unprecedented crash or recession. US markets can only be considered as a market with a bull’s eye. However, with the rise in optimism among investors, we can expect that the US economy will turn out to be healthy in the coming years.
The US economy will be able to recover and will emerge as a strong economy growing at a steady rate. Besides, there are several factors working in favor of this. Here are few points to ponder upon.
US stock markets are witnessing unprecedented growth in the number of buyers. And this has led to an increase in the number of sellers too. Thus, the liquidity in the markets has been further augmented which further augmented liquidity in the markets. This has been one of the major reasons for the stock market crash. However, all this does not mean that the US stock market is headed towards an unprecedented crash or recession.
The US economy is a very vast system and it can never break down. The present US stock markets show a marked picture of healthy competition among companies. And it also shows that there are still numerous stocks in thousands of dollars stage in the market. The US stock markets are showing a marked picture of healthy competition among companies. And it also shows that there are still numerous stocks in thousands of dollars stage in the market.