Robinhood Gets $1B Funding, Taps Credit Line As It Prepares To Resume Trading Of GameStop, Other Hot Stocks

Robinhood is prepping to restore trading in the shares of GameStop Corp GME and other stocks at the center of the recent retail investor fueled frenzy by accessing a credit facility led by banks, the Financial Times reported Thursday.

What Happened: The trading app has accessed a credit line worth several hundred million dollars facilitated by banks led by JPMorgan Chase & Co JPM, Goldman Sachs Group Inc GS, Morgan Stanley MS, Barclays Plc BCS, and Wells Fargo & Co WFC, people familiar with the matter told FT.

Separately, the New York Times reported that Robinhood also raised $1 billion from existing investors including Sequoia Capital and Ribbit Capital on Thursday night to help it continue operating. The investors will get equity at a discounted valuation tied to the price of Robinhood shares when its IPO happens, as per NYT.

Robinhood co-founder Vlad Tenev told CNBC on Thursday that the company is doing “what we can to allow trading in certain securities tomorrow morning.”

On the same day, Tenev tweeted that Robinhood had many financial requirements as a brokerage including SEC net capital obligations and clearinghouse deposits.

Why It Matters: Robinhood was not alone in suspending trading in hot stocks such as GameStop, AMC Entertainment Holdings Inc AMC, Nokia Oyj NOK, and Blackberry Ltd BB.

Rivals such as Schwab and ETrade also restricted trading on Thursday.

Trading restrictions have angered Robinhood users, many of which have been airing their displeasure on social media and speculating a move to rival Square Inc’s SQ Cash App platform.

See Also: Facebook Takes Down Trading Group With 157,000 Members Amid GameStop Frenzy

Photo: Courtesy of Robinhood