So, there is a company. Media says it’s valued north of $11 billion. And then comes an event which was a litmus test for the company’s philosophy and it blinked and caved. And now, reports suggest it’s in dire need of money and had to raise $1 billion on the spot. I don’t blame the company. They are free to do anything. It’s a dog eat dog world. If you are not a dog, you’ll be eaten by the dogs. The only thing that puzzles me is... was the company surviving hand to mouth, paycheck to paycheck? Let’s say another such event were to happen next week and nobody is there to write a $1 billion check, is the company doomed? 🧐🤔🧐🤔🧐🤔🧐🤔🧐🤔🧐 My mind is ready and so is my body. To take my stock portfolio out of this company as soon as humanly possible.
I don't think they are living pay check to paycheck, the 1billion is just cash reserves that RH needs to deposit to market to process the transactions. This is because of volatility in the stocks that's being traded.
I’m a little new and beginning to understand these things in depth only now. But, doesn’t it sound troublesome that they had to raise 1b on the spot to do that. I mean, 1b funding for a company is huge... that’s like series c or later.
DTCC raised margin requirements on settlement from 2-3% to 100% on some of these meme stocks. With the amount of trading volume going on in Robinhood on these meme stocks, the reserve cash liquidity constraints suddenly went up by a lot.
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Well they're valued at 11 billi, but that most of their funding rounds were at a much lower valuation so.. they don't really get access to the cash until they ipo and sell some shares but they fucked that up didn't they 😂