Robinhood has now entered full blown crisis mode as even more stocks are restricted

Amid reports that Robinhood executives are in bed with the hedge funds another report has surfaced. According to multiple reports out Saturday afternoon, Robinhood now claims that the reason why it restricted so many stocks is because that its cash reserve was running low.

Editors note: When Robinhood references its cash reserve at least in this instance they are referencing their “Instant Deposit” feature. It is similar to borrowing money from a pal and then paying them back.

Now back to where we started.

According to the company, more than 50 stocks including Starbucks and General Motors, have all been suspended until further notice. The move as explained comes in part because Robinhood can’t afford to be the Robinhood in which it was designed t o be. As a result of the intense buying spree on behalf of everyday Americans, it has reportedly tapped credit lines to the tune of nearly $1B.

An important fact from this story is that the company is now required to cooperate with (“The Clearing House”) to cover trades entirely forgoing its famed “Instant Deposit” feature. They were unable to meet their deposit requirements when the instant service was active which has resulted in interventions from (“The Clearing House”.)

Meanwhile billionaires are pushing the narrative that “stimulus” checks are to blame for the push in sudden investments by America. While that may be in part the case, others simply have a reserve of cash saved up from being unable to spend their money for more than a year. As it appears many Americans are finding out that by investing small amounts of money in stocks and crypto — one can generally earn quite the return as evidenced by the craze over Gamestop and AMC.

I think wherewithal from governmental stimulus ultimately is really the cause,’ Gundlach, founder of the $148 billion bond fund DoubleLine Capital, told Fox Business on Friday.

The company maintains that it has done nothing sinister despite their own words and actions coming back to haunt them (and amid revelations they’re in bed with Citadel.)

It was not because we wanted to stop people from buying these stocks,’ Robinhood said in a blog post. 

‘We did this because the required amount we had to deposit with the clearinghouse was so large – with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements – that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements,’ the company said.