Investing
Robinhood’s Rescuers Are Sitting on $5.4 Billion of Gains This Year
Investors have scored returns in excess of 150% after bailing out the brokerage firm during the GameStop trading frenzy.
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When hordes of retail traders caused meme stocks such as GameStop Corp. to soar at the beginning of the year, Robinhood Markets Inc. faced a potentially terminal margin call and needed to raise cash fast.
The online trading platform turned to investors including Ribbit Capital, Iconiq Capital, New Enterprise Associates and Index Ventures for a $3.55 billion rescue in the form of convertible debt. The venture firms drove a hard bargain — the debt would convert to Robinhood shares at 70% of the company’s offering price when it went public.