Robin hood is on the verge of bankruptcy. Today i want to talk about why robin hood will have to locate and buy shares during their bankruptcy, causing their amc squeeze so stay tuned and let's make some money - and i want to dive straight in with the key information. So this article just dropped suggesting that robin hood are begging their clients to stay just a little bit longer. It says young investors flocked to robin hood financial during the market rebound and day trading frenzy between 2020 and 2021, but now the trick for the commission, free trading app will be convincing them to stay with the brand robin hood's chief brokerage officer stated that we have 23 million users we'd love for them to stick with us and grow, but we have to provide them avenues, so they can do all the things that they're looking to do.

It says robin hood lost 392 million dollars in the first quarter of this year, and its share prices plummeted below seven dollars down a whopping 87 from a high of around 55 in august of last year. Analysts also expect robin hood to post another 314 million dollar loss for the second quarter and 1.25 billion dollars in losses for the full year says. While the company has 23 million users, its tally of active users is declining and fell to 14.6 million users in may. Down 39 year-over-year, on top of that is total assets under custody was 73.9 billion dollars.

In may down 25 year-over-year says collectively. Stock analysts have forecast the robin hood will not become profitable within the next three years, setting a negative perception reinforced when insiders sold additional shares. So robinhood's downfall is mainly caused by a number of terrible decisions combined with a company. That's grown too quickly during 2020, robin hood obviously exploded with popularity, massively increasing their head count, massively increasing their marketing budget and massively increasing all types of expenditure across the board, as their revenue was starting to rise as well.

Between 2019 and 2021, the robin hood headcount expanded six-fold from 700 employees to 3 800.. Back in april they did cut their workforce by around nine percent, so nearly 10. But i don't think that's much of a den robin hood. Have these costs that are spiraling out of control, with revenues that are ever decreasing due to the number of bad decisions that they've made over the last year or two, a small list of the current robin hood controversies is obviously the payment for order flow controversy.

A number of security breaches that have happened over the last few years, an infinite leverage glitch, obviously turning off the buy button and numerous different outages, a 2020 sec pro, which also happened again in 2021 and the gamification of investing. Obviously, in 2021 they took away the buy button which led to around a hundred thousand negative reviews on robin hood and led to millions of robinhood customers leaving the platform for other safer and better investing platforms that don't use payment for order flow or don't accept payment. For order flow like moomoo, for example, now, obviously, this is going to continue as the year progresses. More investors are going to leave the market during the current bear market and more investors are going to leave robin hood in favor of other trading platforms.

Robin hood's costs are going to continue spiraling out of control and at some point, robin hood won't be able to raise additional funding and they will run out of cash. We're already seeing a number of crypto trading platforms like coinbase and blockfi suffering massively having to cut workforces by 20 and like block fi, taking on emergency loans from ftx to the tune of 250 million. These platforms are very, very quickly running out of cash and struggling to generate additional investor capital. Obviously, block 5's valuation fell from around 5 billion last year and they've struggled to raise cash at a 1 billion valuation.

The exact same thing is going to happen to robin hood they're, going to struggle to raise additional capital, they're gon na struggle to sell shares if they issue new shares to the market and the stock price is gon na fall further and robin hood will run out Of cash, they may say tom what happens when robin hood runs out of cash and goes bankrupt? There are still millions of users that use robin hood, as it says in the article there's around 14 million daily active users. Many of those users do currently hold a lot of stocks in their account, and many of these users likely still hold amc and gamestop and other shorted stocks in their accounts as well. Now i think it's important to realize that, due to the sheer number of synthetic shares out there right now, these shares that are currently sat in these accounts are likely just ious and not actually real shares. It's likely that robin hood didn't actually buy.

All of these shares that's why they had to post so much collateral to the dtcc, because they weren't fully hedged on their positions and they hadn't actually bought all of the shares. Now, on top of that, all of these shares are lent out to other hedge funds and therefore robin hood will actually have to locate all of these shares and buy them back when the platform goes bankrupt. When robin hood goes bankrupt, all of these users or all of the user accounts will be transferred to other platforms like weeble td, ameritrade or any other broker, and obviously to transfer your robinhood account during a bankruptcy. Robinhood will have to go out into the market.

Locate actual real amc and gamestop shares, buy them back and send them to the other broker during the transfer. Robin hood obviously can't just issue an iou to another broker, while robin hood is going through a bankruptcy during a bankruptcy. I use just don't cut it and guys, if you haven't already be sure, to sign up to moomoo right now, using the link in the description below to get 10 free stocks worth up to a total of 25 000 from mumu's latest terms and conditions. They've stated that futu and moomoo don't accept payment for order flow.

They've stated they do not sell your order flow. They do not route trades through brokers like apex, clearing or the citadel. They actually root their trades on their own through food to incorporate it. On top of all of that, moomoo, even don't lend out your shares to other institutions, so they can't lend out your shares and other institutions can't borrow your shares when you sign up to moomoo, therefore, for robin hood to actually go bankrupt and to liquidate robin hood As a company they'll have to go into the market, buy all these shares of amc and gamestop transfer, these user accounts to other brokers, and then the company can be wound down.

Robin hood has 14.6 million daily active users, i'm sure a number of these users have sold their amc stocks and already changed platforms. But time and time again i do see in my comments, people that are still using the robinhood platform and still holding their amc shares inside of robin hood. For many users, they simply don't want to change brokers, just in case amc and gamestop squeeze during the transfer, and they end up out of luck. All of these users that do still have amc shares inside of robin hood that are likely holding ious robinhood will have to go into the market locate.

All of those shares buy them back and transfer them to another broker. Robinhood's gon na have to go into the market and buy up millions and millions, potentially even tens, if not hundreds of millions of amc, shares and transfer them during their bankruptcy, which will cause the short squeeze now. I don't think this is the only possible scenario causing the amc squeeze. I just think it's another potential catalyst that will cause the squeeze.

There's also another article here that talks about the unraveling of robin hood's fairy tale. It says an online brokerage that helped usher in an investing revolution faces a number of new threats. So where does it go from here? This article talks about how, during the pandemic robin hood exploded onto the scene raking in more than 22 million funded customer accounts. But then the party ended it says in the span of less than a year, its monthly active use account dropped by 25 in the first quarter, revenue fell even faster down 47 and the stock hit record lows trading 81 lower below its ipo price.

The article talks about insane growth, which, on the face of it, sounds like a great idea or sounds like a good thing, but as i've explained, it's not good when costs are spiraling out of control, but revenues are decreasing. Robin hood has already experienced a potential takeover. A potential bailout with fdx exchange investing 648 million dollars into the company just for robin hood to survive, speaking of which fdx was also. The company that recently invested into block fi and it seems like ftx, is basically bailing out every single crypto exchange and every single trading platform on wall street.

I don't think this is a smart move of ftx and i do believe that robin hood still has further to fall. This tweet from zero hedge shows a nomura special rapport. No murrah have said staring into the void. A recession is now likely.

They've said the fed's commitment to restoring price stability will likely push the economy into a downturn. Now, obviously, no more are a major investment bank and they're saying with rapidly slowing growth momentum and a fed committed to restoring price stability, we believe a mild recession starting quarter. Four of 2022 is now more likely than not. Nomura is saying that, due to tightening financial conditions, negative sentiment, shock energy and food supply, disruptions and price rises that these factors will contribute to the expected downturn.

They're expecting gdp growth for slow they're, expecting unemployment rates to rise, which is obviously key hallmarks of a recession and the deutsche bank. Ceo, is also saying there is a considerable recession risk in 2023 in europe and in the u.s. Now i do think these major banks and ceos while they know that a recession is coming, i do believe they're still underestimating just how close this recession is. Many of these major banks are saying the recession will hit in quarter 4 of 2022 or in 2023, but i think it's already upon us and it will be announced at the end of june, when quarter 2 officially finishes and go.

Gavin has tweeted saying that ray dalio's bridgewater fund, which is the largest hedge fund in the world, just disclosed a new 10 billion dollar short position in these new stocks. Bridgewater is shorting 10 billion dollars worth of stocks in companies like allianz like bayer, like bnp paribas like banco santander, axa and many others. These are all major banks, major insurance funds and giant corporations that are all being shorted by bridgewater associates and as patrick hadley tweeted. He said one of the only guys telling the truth in the media.

These days is charles payne who's. Just warned of a major coming short squeeze: hey everyone, i'm charles payne. This is making money and breaking at this moment. Well, the markets are closed to honor juneteenth, but there's still plenty for investors to know and, more importantly, to prepare for in this tumultuous unforgiving environment.

That's really devouring everything, but is there too much pessimism and what, if i told you, we could actually see a monster short squeeze any day now, plus europe's green dreams backfiring badly, and so there we have it. Even charles payne is expecting a monstrous short squeeze. Potentially, over the coming days or over the coming few weeks now, obviously i personally agree with charles on this one. As the market continues to crash, it will cause these hedge funds to end up being liquidated, causing that amc squeeze as hang loose has tweeted they're calling adam aaron a villain because he won't let amc go into bankruptcy and he said how in the world would a Company staying in business be bad, that's right, because the mother of all short squeezes is real, and it's currently destroying wall street.

On the front page of the los angeles times, it talks about the amc boss, who won't let the curtains fall. Clearly, these hedge funds are so scared of aims, he's squeezing and they're so scared of retail investors continuing to hold amc that they've resorted to putting it on the front page of even local newspapers. Don't forget the mainstream media, especially these large newspaper outlets, are majority owned by hedge funds, many of which are currently shorting amc. Clearly, these hedge funds are on their last lines and they are desperate to get retail investors to sell their amc shares so desperate, in fact that they're putting it in the newspapers but guys be sure to.

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