In the conditions of market turbulence, clients of the cryptocurrency service Robinhood Markets Inc., faced with troubles: their accounts continued to work incorrectly.
According to Bloomberg, Robinhood maxed out a $ 200 million line of credit from Barclays Plc, Citigroup Inc. and JPMorgan Chase & Co. last month.
This happened amid the fear of coronavirus caused more than two weeks of sharp fluctuations in the market and large volumes, during which the Robinhood trading platform suffered three significant interruptions.
However, the California-based Menlo Park company said in an email statement its capital position "remains strong."
"We determined it was prudent to draw on our credit line during the week of Feb. 24 in light of market volatility. That capital was returned in full last week," the company added.
Robinhood claimed that companies often take precautions in the current market conditions.
An analyst at Bloomberg Intelligence David Ritter disagrees with this statement. "Companies don't use their credit line unless necessary," Ritter highlighted.
"When companies do, it’s perhaps not a good signal with regard to their cash burn, which could make creditors nervous," Bloomberg cites Ritter's statement.
Over the past few days that have passed since the opening of the credit line, the Robinhood platform has repeatedly extinguished for more than an hour in a row, including the March 2 failure, which covered the entire trading session in the US, during which the S&P 500 index grew by 4.6%.
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