Advertisements

Robinhood Glitch Lets Traders Borrow Unlimited Funds To Buy Stocks

Robinhood, the mobile trading app that has more than 6 million users, is contending with a glitch in its platform that enables some traders to use unlimited borrowed money to purchase stocks.

Known as “infinite leverage,” traders took to Reddit forums like WallStreetBets earlier this week to brag about the funds they were able to borrow despite the low amounts of cash in their accounts.

One trader boasted being able to get $1 million in borrowed funds with just $4,000. Another trader claimed to be able to borrow $50,000, purchase shares of Apple and subsequently lose the money. Robinhood traders also posted videos and screenshots showing how they were able to manipulate the platform including providing directions.

First spotted by Bloomberg, the glitch enables traders to inflate their account balances when borrowing money on margin. A common practice among traders, traders borrow money from the brokerage to purchase stocks. The firm, in this case Robinhood and its banking partner, acts as the lender issuing the money based on account balances, creditworthiness, and other criteria. By artificially increasing the account balance the traders were able to get their hands on more money to purchase stocks. In media reports Robinhood said it’s aware of what it called “isolated situations,” saying it’s communicating directly with the customers.

Today In: Money

This isn’t the first time Robinhood has had to contend with missteps since launching in 2013. Last year it made a PR blunder when it was forced to pull its new checking and savings account off the market. It boasted an interest rate of 3% but the product ran afoul of regulators. It held off until October in finally rolling out a cash management account, which now has a 1.8% APY. Despite that misstep and the glitch its dealing with now, Robinhood should continue on its meteoric rise. Since launching in 2013, it has amassed more customers than E*Trade and has a valuation of $7.6 billion.

Venture capitalists can’t get enough of the startup, throwing hundreds of millions of dollars it’s way. In July it raised $323 million giving it the hefty valuation it now commands. It also has aspirations beyond trading. It recently applied for a national bank charter with the Office of the Comptroller of the Currency. Its not clear how far those efforts will go given the OCC is losing its power to grant nonbank entities bank charters.

Robinhood isn’t the only high profile fintech to suffer from technical issues in recent weeks. In mid-October Chime, a popular challenger bank, experienced an outage that lasted more than 24 hours, preventing many of its more than 5 million customers from making payments and accessing their cash. Chime blamed its payment processor, saying it was experiencing problems that brought down Chime’s website and mobile app. In September Chime suffered a similar, albeit briefer, outage.

Follow me on Twitter.

A journalist for more than fifteen years, I am a freelance writer reporting on personal finance, entrepreneurship, investments, fintech and technology for a variety of media outlets. What sets me apart from my peers is my ability to take complex topics and explain it to the masses. After years of covering the equities markets as a technology reporter and special contributor to the Wall Street Journal, I embarked on a freelance career providing my readers with invaluable advice on everything from investing to landing a job. With the intersection between personal finance and technology getting blurred, cutting through the fintech noise and getting to the bottom of the story is becoming increasingly important to readers around the globe.

Source: Robinhood Glitch Lets Traders Borrow Unlimited Funds To Buy Stocks

24.9K subscribers
🚨 Updated 2019 Robinhood App Review: https://youtu.be/GxrmxfswOQI 💰 Robinhood Vs Stash App comparison video: https://youtu.be/YUPhoO_54EI 🔵 Try Robinhood Stock Trading App + Get A Free Share of Stock: http://share.robinhood.com/erikm53 In today’s six-month Robinhood trading app review, I share my experience and impressions using the Robinhood app over my first six months. I also discuss why I still think it’s one of the best investing apps for beginners to stock trading. You can learn more about the Robinhood app here: http://share.robinhood.com/erikm53 🍏 My Robinhood Tutorial Videos: https://everydayinvesting.com/robinho… 💰 Best Investing Apps For Beginners: https://everydayinvesting.com/best-in… —————————————————————————————————– 🚨 ★★★ My Other Investment App Videos and Tutorials ★★★ 🚨 ► All My Investing App Reviews: https://everydayinvesting.com/investi… ► Robinhood Vs Stash App comparison video: https://youtu.be/YUPhoO_54EI ► Robinhood Cryptocurrency Review: https://youtu.be/mNqlWWYFvHw ► Coinbase Bitcoin App Review: https://youtu.be/qqW04oyN7Ug ► Acorns Investment App Review: https://youtu.be/xELC_EUr_n8 ► Stash Invest App Review: https://youtu.be/Jd3ZYtdp1_M —————————————————————————————————– ► Robinhood Stock Trading App Pros: – Easy to use mobile platform – Commission Free Trading & Investing – No minimum amount to get started – Strong community support – 2 Factor Authentication – SIPC insured up to $500,000 – Great for beginners investing in the stock market ► Robinhood Trading App Cons: – No desktop interface (at the moment) – Less built in research and charts (for advanced users) ———————————————————————————————————- ► My favorite books on investing in the stock market for beginners: — The Intelligent Investor: The Definitive Book on Value Investing — http://amzn.to/2i3UGdP – The Neatest Little Guide to Stock Market Investing Book: http://amzn.to/2hdj2Qd — How to Make Money in Stocks: A Winning System in Good Times and Bad — http://amzn.to/2hV05pi — The Little Book of Common Sense Investing — http://amzn.to/2hV6iBz ———————————————————————————————————- Thanks for watching this Robinhood app review. If you enjoyed it please consider subscribing to my other Investing YouTube channel for more investing app reviews and tutorials. SUBSCRIBE HERE: ►►► https://everydayinvesting.com/subscribe/ ___________________________________________________________ 💡 Connect with Everyday Investing on Social Media: ► YouTube: https://youtube.com/EverydayInvesting ► Twitter: https://twitter.com/EverydayInvest ► Instagram: https://instagram.com/EverydayInvest ► Facebook: https://facebook.com/EverydayInvest ► Official Website: https://EverydayInvesting.com ___________________________________________________________ 💼 For business inquiries please reach me here: ★ https://everydayinvesting.com/contact/ ___________________________________________________________ — VIDEO GEAR I USE TO FILM YOUTUBE VIDEOS — 💡 https://amzn.to/324UOQK __________________________________________________________ About this video: In this Robinhood app tutorial Erik from Immersive Tech TV reviews the Robinhood free stock trading app over his first six months of using the platform. He shares his positive and negative impressions as well as what makes it one of the best investing apps for beginners. Disclaimer: This video is not sponsored and all the opinions expressed are my from my own experience. Some of the links in this description contain affiliate links, which help support the channel at no additional cost to you. Thank you for watching! If you have any questions about the Robinhood trading app feel free to drop me a comment below and I will do my best to answer it as soon as possible! #RobinhoodForBeginners #EverydayInvesting #RobinhoodApp

Advertisements

Why the Debate Over Stakeholder Value Vs. Shareholder Value is All Wrong

The Business Roundtable, a coalition of America’s leading corporate executives, created a firestorm with its August 19 announcement calling for corporations to create value for all stakeholders rather than simply maximizing value for their shareholders. A debate ensued over whether Milton Friedman was right or wrong in 1970 when he famously declared that the social responsibility of business is to increase its profits.

Some commentators accused the executives of abandoning shareholders; others decried that they were “green-washing” or “purpose-washing:” simply making themselves look good without authentic action.

In reality, large corporations have understood for a long time the importance of creating value for all stakeholders, including their employees, customers, suppliers and communities, as well as their investors, and the Business Roundtable statement just updated the executives’ outward-facing communications to confirm a direction that is both underway and unstoppable.

The statement shows a recognition of two facts:

1.       The business case for creating stakeholder value has already been proved. Without creating value for a variety of stakeholders, and without mitigating the risks associated with subtracting value from stakeholders, a company can’t deliver profits to shareholders anyway, at least not over the medium to long term. Creating value for stakeholders, when managed strategically, doesn’t take away from enhancing profits for shareholders, it adds to it. It is part of good management. This is not a zero-sum tradeoff.

2.       The U.S. economy is suffering from fallout from short-termism, that is, investors squeezing profits out of companies with a shorter and shorter time horizon. Companies pressured to deliver greater and greater profit margins to their financial owners in the space of a quarter, or less, might not be making the investments and strategic directional decisions that will allow them to thrive in the longer term.

The Business Roundtable statement begins: “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”

For a long time the U.S. was known around the world as a “meritocracy.” U.S. policy aimed to provide citizens with equal opportunity, for example through public education or public libraries, and to reward those who worked hard and applied their talent. The “American Dream” refers to the aspiration of immigrants from around the world that they could come to America and within a generation, see the fruits of their labor rewarded through upward social mobility.

But Michael Young, the U.K. Labour Party strategist who coined the term “meritocracy,” knew that once the most talented workers rose through the capitalist system, over time this new elite would naturally consolidate its power, leaving behind those less equipped to succeed, and eventually stratifying society.

The fact that this has occurred in America is widely known, and most political campaigns on both sides of the spectrum claim to want to address the extreme levels of societal stratification now so evident.

The Business Roundtable has recognized that while corporations must be well-managed for the benefit of their owners, U.S. capitalism needs to find ways to ensure a longer-term vision than the one that has morphed out of the automation of stock trading, the rise of passive investing, and the power of activist shareholders wanting to squeeze value out of a company no matter the broader context.

The investor community itself has been alarmed, as evidenced by the rise of a movement subscribing to “Principles for Responsible Investment,” which promotes inclusion of environmental, social and governance (ESG) criteria in evaluating investments, and which now has more than 2300 signatories representing more than 80 trillion dollars in assets under management.

Tensie Whelan, director of the NYU Stern Center for Sustainable Business, notes the difference between value extraction from a company (through “maximizing short-term profits and boosting stock price, often at the expense of stakeholders other than shareholders”) and value creation for a company. NYU research into certain case studies shows a positive financial return on sustainability investments, with many long-term benefits.

Indeed, sustainability, or attention to ESG factors, is the way large corporations are creating value for the company, and therefore for all stakeholders including shareholders. A European Union directive now requires companies to provide non-financial (ESG) reporting to investors as well as financial reporting. Creating value for all stakeholders isn’t a foreign concept to European companies, whose cultural context has historically favored this idea.

Kudos to the Business Roundtable for bringing its statement on purpose into line with 21st century practices. The statement is a signpost that will most certainly make it easier for companies to implement purposeful strategies.

By: Maureen Kline

Source: Why the Debate Over Stakeholder Value Vs. Shareholder Value is All Wrong

Help us learn more about your experience by completing this short survey: https://www.surveymonkey.com/r/RRKS8LZ Subscribe to Alanis Business Academy on YouTube for updates on the latest videos: https://www.youtube.com/alanisbusines… An outline of the two perspectives related to corporate social responsibility: the shareholder model and the stakeholder model. The discussion also includes support for each perspective, including that of famous Nobel​ prize winning economist Milton Friedman.

What Can a Trader Do With Best Buy Stock?

Chutes Without Ladders

As toddlers, my sister and I used to play the famous board-game where depending on the spot where one lands, the individual either slides down a long chute, or climbs a ladder. I had intended to carry my long position in Best Buy (BBYGet Report) into the holiday season as far back as September. This was one of the first names that I got rid of in early October at an average price of $70 and change.

The broad market selloff that stated there has now surpassed the threshold of what many consider to be the definition of a Correction (-10% from the highs) was just getting in gear at that time. The retailers were making a lot of noise regarding trade with China, and this name was one of the first deck chairs thrown overboard for me as my ship started taking on water. I could have made a better sale a day of two prior, but then again, these shares never looked back once I made that sale either.

Download Now: To be a profitable investor you first need to know the rules. Get Jim Cramer’s 25 Rules for Investing Special Report

The stock had been so badly beaten that recently I considered buying back what I had sold. As I usually do with the retailers, I visited my local Best Buy location before taking on some shares. I walked around the store, stopped over by the laptops pretending to need help. Nothing. Look around. Employees walk by. Maybe it’s just the department, so I walk over to household appliances. Same thing.

The employees did not seem interested in making a sale that day. I decided to walk out. I put my hands in my jacket pockets in a way that should have drawn interest from the security employee at the door. Again, nothing. Now it may just be my store, and it may have just been a bad day, but I decided not to buy any shares in the company that day. Lucky miss.

Will I Be Back?

To the store? Definitely. I have thought the employees energetic and helpful in the past. They’ll get another chance. The stock may have to prove itself, especially after Bank of America Merrill Lynch made their opinion known this morning. BAML cut it’s rating on BBY to “Underperform” from “Neutral”, so it’s not like they loved the chain to begin with. However, the firm dropped their price objective for BBY from $70 to $50.

Best Buy will report its Q4 results on February 19th. Industry consensus is for EPS of $2.57, which would be good for earnings growth of 6.2%. Revenue is expected to print somewhere around $14.7 billion, which will illustrate a contraction year over year for that line item.

The stock trades at just 9.8 times forward looking earnings, and given the general outlook for growth, is it possible that these earnings projections are just too high. If relations with China don’t come to an amicable resolution in the near future… perhaps. That’s the way BAML feels at least for the current quarter, but also makes a point of mentioning the full year.

The Catch

The analyst behind the BAML opinion is not highly rated by TipRanks, at least not yet. The last highly rated, high profile analyst that I see that still has a buy rating on BBY, and a much higher price target ($81) is Piper Jaffray’s Peter Keith. My belief would be that if Keith throws in the towel, that the marketplace will notice. Perhaps at that point I will initiate an entry level long but not without another visit to my local store.

Free Lunch?

So, what can a trader do, other than sit on their hands, and wait to see if another shoe drops? Right now, a trader might be able to sell one BBY $47.50 February 15th put at an implied value of $1.29, instead of taking down an equity stake. Hopefully, this trader pockets $129, and takes his or her significant other out for a nice meal.

The risk is that the shares trade below $47.50 by expiration, and the trader is forced to eat these shares at a net basis of $46.21. Note that expiration is four days ahead of this Q4 earnings release. At the time of publication, Stephen Guilfoyle had no position in the securities mentioned.

By:

Source: What Can a Trader Do With Best Buy Stock? – TheStreet

Earnings Economy Investing Options Stocks Trading Consumer Products

Warren Buffett has been and continues to be a role model for millions of investors across the globe. His rich investment history going back to as far as 11 years old when bought his first stock, his impressive story has been used in hundreds of speeches globally, with every investor, beginner or pro, being asked to emulate him. However, who is Warren Buffet? In this video, we are going to look into the life of the man known as the “Oracle of Omaha”, highlighting the investments and decisions he made to become one of the richest and most respected businessmen in the world. Audible 30 Day Free Trial: https://amzn.to/2mO6ow0 #WarrenBuffett #WarrenWisdom Light Sting by Kevin MacLeod is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/…) Source: http://incompetech.com/music/royalty-… Artist: http://incompetech.com/ Practical Wisdom – Producing High Quality Content For Your Enjoyment. Please Consider Subscribing, and enable notifications. Thanks in Advance.

Stocks Making The Biggest Moves After Hours: Cisco NetApp and Vipshop

5.jpg

Cisco fell nearly 8% in after-hours trading after announcing better than expected fourth-quarter earnings and weaker-than-expected guidance. The enterprise technology company reported adjusted fourth-quarter earnings per share of 83 cents on revenue of $13.43 billion. Analysts had expected adjusted earnings per share of 82 cents on revenue of $13.38 billion, according to Refinitiv.

For the first quarter, Cisco said it anticipates adjusted earnings per share between 80 cents and 82 cents. The company said it expects flat to 2% revenue growth. Those figures are below analyst projections for earnings of 83 cents per share and revenue growth of 2.5%, according to Refinitiv consensus estimates.

Cisco CEO Chuck Robbins said the company’s business in China dropped 25% amid the U.S.-China trade war and early signs of macro shifts that didn’t occur in the previous quarter.

Shares of NetApp jumped nearly 4% after the data services and management company reported promising first-quarter earnings. The company reported adjusted earnings per share of 65 cents on revenue of $1.24 billion. Analysts had expected earnings per share of 58 cents on revenue of $1.23 billion, according to Refinitiv. NetApp CEO George Kurian said gross margin and cost structure improvements will help the company “navigate the ongoing macroeconomic headwinds”

Vipshop soared 8% after announcing higher-than-expected earnings for the second quarter. The Guangzhou, China-based company reported adjusted second-quarter earnings per share of $1.58 yuan on revenue of $22.74 billion yuan. Analysts had expected earnings per share of $1.01 yuan on revenue of $21.52 billion yuan, according to Refinitiv. Eric Shen, chairman and chief executive officer of Vipshop, cited the company’s growing numbers of active users and acquisition of Shanshan Outlets.

Pivotal Software shares skyrocketed nearly 70% in extended trading after VMware said it will acquire all outstanding Class A shares at $15 in cash. That price represents an 80% premium on  Pivotal’s closing price of $8.30 per share.

By : Elizabeth Myong

Source: https://www.cnbc.com/

 

%d bloggers like this:
Skip to toolbar