Welcome back to the channel everyone today, i want to talk about why robin hood is currently teetering on the edge of bankruptcy. What really happened to them back in january and how the first domino has just fallen, so stay tuned and let's make some money. But before i dive into the video, if you haven't already be sure to become part of the team and join the private discord linked in the description below there, i've been guiding everybody through the amc squeeze and after the squeeze. I'm also going to be talking about a lot of other stocks and cryptocurrency over there on the discord for a very small monthly fee.

You can talk to other like-minded apes and i and even ask me questions whenever you want, and now i want to dive straight in with the key information. So, as we all know by now the numbers are fake. Imagine it's back to january 26 and you place a buy order for a hundred shares of gamestop at fifty dollars. Each that's five thousand dollars brokers like robin hood, who do payment for order flow, take your money and say thanks for your five thousand dollars and you're.

Now credited a hundred gamestop shares. Now you look at your little quantity owned, nc, gamestop or amc is sitting there, nice and cute at 100 shares. But what you didn't know is that when your broker accepted your five thousand dollars, they didn't actually purchase the 100 shares and that's because brokers have t plus two to settle, which means they've effectively got the trading day and two more trading days to settle and buy Your shares now, obviously back in january, if you paid five thousand dollars for a hundred shares of gamestop on the 26th and then a day passes by and it's january, the 27th gamestop was at 500 a share. Obviously, you only gave your broker five thousand dollars and now they've got to go into the market and spend fifty thousand dollars to settle their t plus two and actually locate your shares and buy them for you and therefore the broker takes a 45 000 loss for Every 100 shares that it has to go out and buy and that's effectively how robin hood got so embroiled back in january and had a three billion dollar margin call.

So obviously, robin hood was asked for three billion dollars to cover the risk from the volatility in gamestop amc and other meme stocks. The nscc asked robin hood to deposit three billion dollars in security to cover that t plus two variants, and that's why the brokerage imposed trading restrictions. Last week, being back in january after robin hood limited that retail trading, the nscc cut down that figure to only 700 million dollars and therefore robin hood was basically forced by citadel and the nfcc to limit retail trading in order to pay a reduced deposit or reduce Security deposit citadel would have in no way bailed robin hood out of that 3 billion, and that's why robin hood was forced to limit retail trading in order to get a reduced settlement. As you can see, the nscc sent in an unusual request early thursday morning to come up with a three billion dollar deposit and he said that the clearinghouse's request was an order of magnitude more than what it typically is.

But after robin hood agreed to restrict retail investors from making further purchases of highly volatile shares, the nfcc agreed to reduce that figure to 700 million dollars early on thursday. So not only is that same event on the brink of happening all over again but as jp morgan say, the number of new robin hood app downloads, a proxy for account. Openings is down 78 from the second quarter of 2021 to the third quarter, and also daily active users. A proxy for activity levels have declined 40 as well from the second quarter of 2021, and those decreases are both substantially weaker than their peers, or those decreases are substantially larger.

So not only is robin hood on the brink of another large margin call but their users, their new users, are down 78 quarter on quarter because of how much bad press they've been receiving recently, and not only that. But it looks like citadel and robinhood are fighting and citadel is now trying to throw robin hood under the bus. It is crystal clear that robin hood, restricted trading in response to a three billion dollar margin call from the nscc, as i just showed in one of the previous tabs. Multiple documents, statements and contemporaneous communications confirm this.

Here is the email from 5 11 am eastern time on january 28th, alerting robin hood to the 3 billion margin call. Now i do find it very interesting that citadel securities have managed to get their hands on this confidential email from the dtcc to robin hood. Not concerning citadel citadel, then posted numerous other tweets tweet after tweet to try and save their own reputation and to also try and it looks like bash robin hood's reputation even more. They even tweeted saying plantiff's lawyers concealed the facts from the court and the public causing conspiracy theorists to churn baseless theories.

We first learned of robin hood's trading restrictions from posts on twitter, as evidenced by real-time communications, and they said our primary robin hood point. Person had to ask robin hood if the twitter posts on the trading restrictions were fact or fiction, so citadel is really going in here, trying to save their own ass and trying to burn robin hood in the process. I think all of this bad press has really been getting to citadel and i think they've had a lot of investor withdrawals, as i spoke about in my video yesterday. If there's too many investor withdrawals and if their assets start decreasing too much, which they have been as apple and many other stocks are already down 10 from their highs, citadel will get margin called now.

You might say well, apple, being down 10, isn't really that huge, but don't forget citadel, have an 8.1 times leverage ratio and therefore a 12 drop in a stock means they get margin calls because, obviously, 12 times. 8 is 100. So, therefore, if a stock drops by 12 because of their leverage, it means their actual cash position, falls by a hundred percent, and on top of that, if you've got all of these investors trying to take cash out of that cash and asset position, it means that Citadel is going to be having to sell off securities that are already down in order to manage those investor withdrawals. Therefore, i think citadel is really really in the mud at the moment and they're trying to do anything they can to not destroy their own reputation and instead to destroy robin hood's reputation.

That's why we've seen citadel not tweet for nine months and then post what seems like 50 tweets in the space of two or three days, but the one thing they didn't count on is the apes. Do you care to explain the following? On 8 39 point. 23 a.m. Eastern time citadel claims to have seen a tweet saying robin hood is restricting the buying of amc and gamestop, but the problem being is the robin hood didn't announce this via tweet until 9, 56 am eastern standard time now you may have to adjust for the rolling Back or the rolling forwards of the clocks and the change from gmt to british standard time, but that would only change it to 8 56 a.m.

Eastern standard time and the message was supposedly sent at 8 39 a full 20. Something minutes before that and what makes it even worse is it looks like this photo may have even been doctored and edited and messages cropped out. If you take the photo and put it into photoshop and you change the brightness, you can see there's a vast difference from the first three messages compared to the remaining messages. So it looks like there was potentially more messages in the middle that have been cropped out and the photo's been doctored to try and paint citadel in a more favorable light.

Something that is also very very interesting is that today, on friday, citadel seemed to be a little busy this morning at 4, 00 a.m, even bigger than typical nine to five hours. So far, robin hood and blad have been silent on this and haven't yet responded. I wonder if vlad and robin hood are going to turn around and dig citadel an even deeper hole. I personally think that both robin hood and citadel are currently in very, very bad positions.

Robin has just seen its customer base full by 50 and new signups drop by 75 percent, and it looks like citadel is having a massive wave of investor withdrawals and now peter han seems to think the first domino has now fallen. My guess for today afternoon's price movement was a small hedge fund breaking ranks. My suspect is o day asset management. In august they bragged at having sold in the mid 50s.

When amc was at 32 on september 10th, it was reported that they'd lost most of their gains. They'd. Obviously shorted amc down from the 50s down to the 30s, but they're not sold when amc bounced back up to the 50s again. So, with quarter three ending they'd locked in their gains, they'd lost beforehand by any means possible by covering their position now around 35.

Although lou reckoned in his most recent video that it was just a chunk and not their entire overall position, user of intellect the phd data analyst reckons that shorts covered around 10 to 20 million shares on that spike, and that was to keep the exchange reported short Interest around 20 - something i also think is super super interesting. If you have a look at the public calendar for the us courts on the government website, you can see that on october the 25th there's a new court case for citadel securities llc versus the sec. I am super super interested to tune into this to see what it's all about guys be sure to. Let me know down in the comments below what you think about robin hood, teetering on the edge of bankruptcy and, if you haven't already be sure, to become part of the team and join the private discord linked in the description below and as always guys.

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