Robinhood has raised another $2.4bn from its shareholders after a turbulent week amid a surge of new investors piling into Gamestop.
The online trading app today confirmed it had raised $3.4bn to invest in “record customer growth” including a $1bn injection on 29 January.
Last week Reddit day traders flocked to Gamestop lifting its share price to new heights in an attack on Wall Street’s hedge funds.
Robinhood, which does not charge its users any fees, has been a popular choice for Reddit investors to snap up Gamestop shares along with other nostalgia stocks like AMC and Blackberry.
The online brokerage faced severe backlash from investors after sharp swings in the value of stocks meant it was forced to restrict trading.
The $3.4bn raised, which is more than the company has ever raised, gives Robinhood sufficient cash to cover any potential losses on the transactions, according to the Wall Street Journal.
In a blog post today the company said: “We’re witnessing a movement of everyday people taking control of their own financial futures, many investing for the first time through Robinhood. With this funding, we’ll build and enhance our products that give more people access to the financial system.”
Last night Robinhood chief executive Vlad Tenev spoke to Tesla founder Elon Musk on Clubhouse, a social media app popular with the tech community, about why the company had to restrict trades.
He revealed a clearing house had asked for $3bn to back up the trades which is “about an order of magnitude more than what it typically is”. There are still some trading restrictions on limited stocks but users can still buy one share and five option contracts for Gamestop.