Then why do they need cash? Are they holding unsettled trades?
If all they are doing is acting as an accounting for customer holdings at a remote entity, then what do they care? The clearinghouse could be backed up, limiting the trades they’ll take, thatvwpukd cause RH to limit customer activity, but how would that drain Robinhood?
The PTB, Billionaires were shorting the stock. The kids decided to buy to show them up and take them to the cleaners. Now the PTB are stuck for the cash to make good on that difference. It’s costing them billions! LOL I think it’s hilarious. It calls out Wall Street as the exclusives only profit making scheme it is. God forbid the peasants should make a profit.
My understanding is that a major way RH made their money was to loan out the shares held by the users of the app. Thus with the flash mob grabbing shares through RH, and after annoying much of their users by trying to protect those they loaned the shares to, RH is now in a short squeeze themselves. If you sell your shares from RH then buy them somewhere else RH has to produce the shares from somewhere, to send them to your new location.