Anonymous sources inside digital exchange Robinhood said that its plans for initial public offering (IPO) have been put on hold amid the fallout of the GameStop saga, according to Fox Business Network senior correspondent Charles Gasparino.
SCOOP: Ppl inside @RobinhoodApp tell @FoxBusiness plans for an IPO are on hold to focus on surviving the current drama over trading of stocks and settlement issues. Execs say they have access to even more capital than additional amounts raised today. More @TeamCavuto 1230pm
— Charles Gasparino (@CGasparino) February 1, 2021
“Ppl inside @RobinhoodApp tell @FoxBusiness plans for an IPO are on hold to focus on surviving the current drama over trading of stocks and settlement issues. Execs say they have access to even more capital than additional amounts raised today,” wrote Gasparino.
Loss of confidence
According to a recent survey conducted on anonymous network Blind, 83% out of 8,750 surveyed professionals think that Robinhood has indeed “screwed its IPO.”
As CryptoSlate reported, Reddit group WallStreetBets has sent huge ripples across the world of finance when it managed to pump the declining—and heavily shorted by hedge funds—stock of video games retail network GameStop (GME). As a result, several big players from Wall Street suffered huge losses since they were betting on the stock’s price going down—not up.
Subsequently, Robinhood drew the ire of both the general public and politicians alike when it restricted retail traders from guying GME stock amid the rally. The US Securities and Exchange Commission (SEC) has already stated recently that it “will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”
While Robinhood CEO Vlad Tenev later stated that halting GME purchases “was a clearinghouse decision, and it was just based on the capital requirements,” it looks like at least some irreparable damage to the platform’s reputation has already been done nonetheless.
Bracing for intense scrutiny
Meanwhile, according to Gasparino, the SEC is not the only agency that decided to review the GameStop saga. The US Congress is reportedly planning to propose some restrictions on hedge funds trading, including short selling, in response to the GameStop incident.
BREAKING: Hedge fund execs tell @FoxBusiness theyre bracing for intense congressional scrutiny, possible restrictions on trading such as short selling amid $GME–@Reddit–@RobinhoodApp frenzy. Hedge fund trade groups gearing up and plan to lobby Congress. w More 330pm @LizClaman
— Charles Gasparino (@CGasparino) February 2, 2021
“Hedge fund execs tell @FoxBusiness they’re bracing for intense congressional scrutiny, possible restrictions on trading such as short selling amid [email protected]@RobinhoodApp frenzy,” Gasparino noted, adding, “Hedge fund trade groups gearing up and plan to lobby Congress.”
On the bright side, Robinhood halting GME trades has seemingly led to DeFi and crypto recognition and decentralized exchanges’ tokens have been booming lately as well.
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