A Little GameStop/Robinhood Perspective: A number of hedge funds got the $GME trade very wrong on a risk/reward basis(I know the feeling), and attracted the interest of smart retail investors. They spread the word via social media, and the stock skyrocketed.
As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.
Whatever your gut reaction to this whole situation is, it is worth a few minutes learning about the plumbing between customers, banks and custodians. Crazy as it sounds, until stock trades settle two days later, the broker is holding the risk, and they need the collateral $$
OK, here *may* be why Robinhood & other brokerages shut down trading.
Not because evil. Because they can't afford the cost!
Due to the volatility of these stocks, their partners now (understandably) want cash up front. No one wants to be holding the bag. https://t.co/3CJv1fqVw7
Early in outbreak, each COVID-19 case infects ~2.5 others on average. There's ~5 days between one infection and next, so we'd expect one case to lead to 2.5^6 = 244 more cases in a month. If we can halve transmission, so each infects 1.25 others instead, we'd expect 4 more cases.
Here's the coronavirus data, overlayed with the dates offset by the amounts shown. One of these countries is not like the rest. Everyone else will be Italy in 9-14 days time.
With recorded COVID-19 cases (outside china) so eerily matching an exponential, I couldn't resist making a primer on exponential/logistic growth. At least 3 counterintuitive things about this kind of growth seem worth putting into the discussion.
https://t.co/UNqvsybiAL
Costco is a fascinating business.
You know all those groceries you buy?
Yeah, they basically sell those at breakeven and then make all of their profit from the $60 annual membership fees.
Quick [THREAD]
The first version of the software was only compatible with Macintosh computers, and received a glowing endorsement from Apple, Inc. (NASDAQ: AAPL) co-founder Steve Jobs.