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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.

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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

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🚨 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

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Berlin Agrees Five-Year Rents Freeze To Tackle Housing Prices Boom

The local government in Berlin has agreed to freeze rents in the German capital for five years as the city is battling with skyrocketing housing prices.

The Berlin Senate’s majority, which is composed by the Social Democrats, Greens and the Left party, approved the decision last week after months of discussions.

The plans will be sent to parliament this month, where they are expected to be approved and to take effect in January 2020. They also include measures to cap subletting contracts.

“We’re entering new territory,” said Berlin Mayor Michael Mueller. “Others talk about it, but we’re actually doing it.”

The clamp down on rent rise, one of the most extreme decisions taken by a Western capital in recent times, is being followed with close interest by other world cities.

The plan was initially proposed by the Left party. Katrin Lompscher, the party’s head of urban development and housing, said the intention was to “ease the burden” on tenants after a property boom which saw rents doubling over the last 10 years.

German house-builders’ and property companies’ shares were hit hard on October 21st. Deutsche Wohnen, Berlin’s largest private landowner, saw its shares fall by 4.6%. Shares of Vonovia SE, the largest property company in the country, fell as much as 1.6%.

Today In: Consumer

A separate grass-root initiative attempting to force Berlin’s local government to expropriate over 200,000 properties from large landlords is ongoing.

In August, Forbes.com revealed that Berlin is the city with the highest growth for prices of luxury real estate in the world.

For the second year in a row, the German capital had recorded the strongest price growth rate globally, with a 12% increase year-on-year – according to data from Knight Frank.

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I am a business reporter focusing on real estate, retail and technology. I am currently Chief Investigative Reporter at Property Week, where I lead the magazine’s investigations unit. I have been nominated as Best Print Writer at the BSME Awards in 2019 and 2018 and as Best Journalist – Infrastructure, Development and Construction at the British Journalism Awards in 2017. Prior to that, I worked as a freelance for a number of publications across the U.K., France and Italy including The Bureau of Investigative Journalism and La Repubblica. I hold an MA in Investigative Journalism from City University of London and an MA in French literature from Ca’ Foscari University of Venice.

Source: Berlin Agrees Five-Year Rents Freeze To Tackle Housing Prices Boom

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Cisco, Tilray, Aurora Cannabis, Alibaba, Trade Talks – 5 Things You Must Know

Here are five things you must know for Wednesday, May 15:

1. — Stock Futures Lower Amid Subsiding Trade War Worries

U.S. stock futures were lower Wednesday though sentiment was lifted by a softening of the rhetoric from Donald Trump in the U.S.-China trade war and suggestions that talks could resume in the coming weeks.

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Markets also were soothed by weaker-than-expected economic data from China that pointed to not only slowing growth in the world’s second-largest economy but also a weakening bargaining position in Beijing’s trade standoff with Washington.

With Trumps describing the dispute with China as “a little squabble” on Tuesday, as well as confirmation from the U.S. Treasury that Secretary Steven Mnuchin will soon travel to Beijing to resume trade talks, markets were happy to add risk following Tuesday’s gains on Wall Street.

Contracts tied to the Dow Jones Industrial Average fell 85 points, futures for the S&P 500 declined 8.70 points, and Nasdaq futures were down 23 points.

The economic calendar in the U.S. Wednesday includes Retail Sales for April at 8:30 a.m. ET, the Empire State Manufacturing Survey for May at 8:30 a.m., Industrial Production for April at 9:15 a.m., and Oil Inventories for the week ended May 10 at 10:30 a.m.

2. — Cisco, Alibaba and Macy’s Report Earnings Wednesday

Alibaba Group Holding (BABAGet Report)  posted stronger-than-expected fiscal fourth-quarter earnings as consumer growth on its online marketplace surged and its tie-up with Starbucks (SBUXGet Report) , the world’s biggest coffee chain, helped boost revenue and its cloud computing sales surged.

Macy’s (MGet Report)  earned 44 cents a share on an adjusted basis in the first quarter, higher than estimates of 33 cents. Same-store sales rose 0.7% in the quarter vs. estimates that called for a decline of 0.6%.

Earnings reports are also expected Wednesday from Cisco Systems (CSCOGet Report) and Jack in the Box (JACKGet Report) .

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3. — Tilray Rises After Revenue Beat, Aurora Cannabis Slumps

Tilray  (TLRY) shares were rising 4% to $50.71 in premarket trading Wednesday after the Canadian cannabis company posted stronger-than-expected first-quarter sales, while its domestic rival Aurora Cannabis (ACBGet Report) slumped after revenue missed analysts’ forecasts amid caps on retail store growth in the Canadian market.

Tilray said first-quarter revenue rose 195% from a year earlier to $23 million, as sales in Canada surged following the country’s decision to legalize cannabis for recreational use. The adjusted loss in the quarter was 27 cents a share, wider than analysts’ estimates, after a 5.7% drop in the average price per kilogram sold.

CEO Brendan Kennedy also said Tilray was looking to further its partnerships with U.S. and international companies as the potential $150 billion global market for cannabis undergoes a generational change in both regulation and consumer acceptance.

“We’ve been inundated with contacts from Fortune 500 companies who are interested in exploring partnerships with Tilray,” Kennedy told investors on a conference call late Tuesday. “And it’s a range of companies from a broad variety of industries.”

“We’re also starting to have conversations with U.S. retailers who are interested in carrying CBD product in the second half of this year,” he added.

Aurora Cannabis, meanwhile, was tumbling 4.7% to $7.99 in premarket trading after its fiscal third-quarter revenue of C$75.2 million missed Wall Street forecasts of C$77.2 million and consumer cannabis sales were just under C$30 million as provincial regulators limited the number of retail outlets.

The company reported a loss attributable to shareholders in the quarter of $C158 million said Aurora Cannabis said it was “well positioned to achieve positive EBITDA beginning in fiscal Q4.”

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4. — Walmart Considering IPO for U.K. Unit Asda

Walmart (WMTGet Report) is considering an initial public offering for its U.K. grocery subsidiary Asda, a listing that that could value the company at as much as an estimated 8.5 billion pounds ($11 billion), Bloomberg reported.

The news comes just weeks after U.K. antitrust regulators blocked a planned merger between Asda, Britain’s fourth-largest supermarket, and rival J Sainsbury.

“While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO,” Judith McKenna, the company’s international chief, told employees at an event in Leeds, according to a summary of the event provided by Asda. Any preparations for going public would “take years,” she said, Bloomberg reported.

5. — Nelson Peltz’s Trian May Wage Activist Campaign at Legg Mason – Report

Nelson Peltz’s Trian Fund Management may wage an activist campaign at Legg Mason (LMGet Report) and push the mutual fund company to improve its flagging results, The Wall Street Journal reported, citing people familiar with the matter.

It would be the second time in 10 years that Trian has targeted the mutual fund company, according to Reuters.

Trian recently has held discussions with Legg Mason about the need to cut costs and improve profit margins, the people told the Journal. The two sides may still negotiate a settlement that sidesteps a proxy fight, the sources added.

On a conference call with analysts Monday, Legg Mason CEO Joseph Sullivan said the company was moving to slash expenses.

“While there is much work to be done, we now have increased visibility into and have gained even greater confidence in our ability to deliver $100 million or more of annual savings now within two years,” he said.

By:

 

Source: Cisco, Tilray, Aurora Cannabis, Alibaba, Trade Talks – 5 Things You Must Know

Blackstone Calls Logistics Its ‘Highest Conviction’ Real Estate Idea After Striking $18.7 Billion GLP Deal

At Blackstone Group, the world’s largest private equity firm, with $512 billion in assets under management, few properties or companies are out of reach. So when the firm strikes a record-setting deal and anoints the sector as a top firm-wide idea, it’s worth listening to.

In real estate, Blackstone is doing just that when it comes to logistics space—the warehouses where the orders of Amazon and other e-commerce giants are delivered in bulk, sorted and sent out to customers. On Sunday evening, the firm disclosed an $18.7 billion deal for the U.S. logistics assets of Singapore’s GLP, inking the biggest private real estate deal in history. And Blackstone isn’t coy about its optimism for the real estate that houses America’s increasingly e-commerce-oriented supply chain.

“Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand,” Ken Caplan, co-head of Blackstone’s real estate business, said in a statement.

It’s a bold statement coming from Blackstone given that logistics space is probably only noticeable to the average American as they drive along the interstate or make landings at airports on a clear day.

The warehouses Blackstone is buying are often massive white windowless and logo-less boxes bigger than a football field. They sit adjacent to airport runways, highways, large ports and rail hubs. Increasingly, inside these buildings is what looks like science fiction: Massive robots move and sort palettes of goods, drones check inventories, and orders are sifted and sorted on conveyors that have the sophistication of an automotive assembly line.

For Blackstone, Sunday’s deal is a major doubling down on the U.S. logistics market. Its $140 billion real estate investment arm rolled up logistics warehouse operators and formed Indcor, which it sold to GLP for $8.1 billion in 2015. Then the firm’s real estate gurus set their sights on Europe, building pan-European giant Logicor into a $13.8 billion logistics behemoth that was sold to China Investment Corp. in 2017. In buying GLP’s U.S. business, Blackstone is bulking back up with familiar assets, acquiring some 179 million square feet of urban, in-fill logistics assets nationwide, doubling the size of its existing footprint. It also bought back a piece of Logicor from CIC in late 2017.

Blackstone’s global opportunistic real estate funds will acquire 115 million square feet of GLP space for $13.4 billion and its income-oriented non-listed real estate investment trust, BREIT, will acquire 64 million square feet for $5.3 billion. “Our global scale and ability to leverage differentiated investment strategies allowed us to provide a one-stop solution for GLP’s high-quality portfolio,” said Caplan.

Blackstone has its pick of real estate ideas to crow about.

It is one of the biggest office, hotel and single and multifamily property owners in the United States and globally. Its $140 billion portfolio contains 231 million feet of office space globally, 151,000 hotel room keys, 75 million feet of retail real estate, and 308,000 residential units and homes. It built and remains a top shareholder of Invitation Homes, an NYSE-listed single-family landlord with a portfolio of 80,000 homes nationwide. In Chicago, Blackstone owns the Willis Tower, and in Las Vegas it owns the trendy Cosmopolitan hotel and casino. By square footage, logistics space now appears to be Blackstone’s top real estate holding.

The $18.7 billion price tag is a coup for GLP, the seller. Based in Singapore, GLP is was cofounded by entrepreneur Ming Zei Mei, who spun out the international logistics space of Prologis, mostly based in China, Brazil and India. Now GLP, short for Global Logistics Partners, operates 785 million square feet of space, with more than half in China.

Once listed in Singapore, GLP was taken private in 2017 by its cofounder and a consortium of Asian investors including HOPU Jinghua (founded by Goldman Sachs’ former China chairman), Hillhouse Capital and China Vanke Co. In addition to logistics space, GLP is becoming a force in real estate and private equity asset management, with $64 billion under its watch. For the firm, Sunday’s deal is a watershed, reportedly receiving interest from Prologis, a publicly trade real estate investment trust that is the leader in U.S. logistics space.

“GLP was able to leverage our deep operating expertise and global insights in the logistics sector within four years to build and grow an exceptional portfolio,” Alan Yang, chief investment officer of GLP, said in a statement. As it recycles capital, the firm remains bullish on the U.S. “We are looking forward to expanding our footprint in the United States to continue to seize key opportunities in the U.S. market,” Yang said.

For more on Logistics:

See our 2017 feature on Prologis, the world’s logistics leader

Also see our mention of GLP in our coverage of a bet Brookfield made in China.

I’m a staff writer at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, M&A and banks.

Source: Blackstone Calls Logistics Its ‘Highest Conviction’ Real Estate Idea After Striking $18.7 Billion GLP Deal

Stock Market Vs. Real Estate: The Right Approach For Passive Income Investors

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For new and hopeful passive investors, most of the accessible information on the topic of the stock market versus real estate presents widely varying opinions and tends to over complicate things by assuming you have a solid education in both fields. Rather than feeling informed, this type of guidance tends to leave you in a state of confusion.

For newcomers to the debate of real estate or the stock market, I prefer to share an oversimplification of the subject to ensure you can capture the basics, providing enough information so you can start asking better questions as you embark on an investing path.

First, I am assuming that you want to grow your retirement funds in a safe investment that will produce decent returns. Second, I am assuming you are busy and don’t have the time to gain the in-depth knowledge and experience needed to actively trade or invest in the stock market or real estate and are rather looking for simple solutions.

When it comes to your retirement and the stock market, the most common passive investments are mutual funds. If you’re fortunate enough to average a 10% return on your investments and then you factor in inflation and fees, your eventual return may be lower than anticipated.

In real estate, your passive opportunities are in private lending and rental properties. Private lending commonly involves lending funds to a real estate investor or business in exchange for a set return and length of time. (Full disclosure: I am co-partner of a turnkey investment company.) Turnkey rental properties allow the investor to be as hands-off as they like. This means a turnkey company purchases, rehabs, tenants and manages the property. To truly make this a passive investment, turnkey companies do all the work for you.

Here’s what several key factors of a passive investment looks like in real estate and the stock market:

Control: With the stock market, you are at the mercy of the fund and management. With private lending, you control who you invest with, the rate of return, the length of time you want to invest and approval of the asset your money is secured by. With rental properties, you are in control of what you buy, the improvements that will increase rents and what costs are passed onto the tenants, such as landscaping and shared utility expenses.

Tangible asset: With the stock market, you lack anything tangible. With private lending and rental real estate, your funds are secured by a physical asset.

Cash flow: With the stock market, if we hit a down cycle, your profits are instantly lost. In real estate, in any economic downturn, private lenders have up to 50% equity already built in, and investors with rental properties keep netting their monthly cash flow from their tenants despite the dip.

Leverage: With the stock market, you invest your retirement savings or cash on hand. The same is true for private lending. You can leverage rental properties four-to-one, sometimes five-to-one, meaning your $50,000 investment can buy you $200,000-250,000 in real estate. In a rising market, this is a good thing and will maximize your cash on cash return.

Tax advantages: If you purchased $50,000 in stock that is now worth $200,000, you will pay taxes on that amount when you sell it. Rental properties provide opportunities for multiple tax advantages such as depreciation, deductions and a 1031 Exchange.

Appreciation: You don’t get to factor in added appreciation when investing in the stock market or private lending, but you do with a tangible asset like rental real estate. When you bring together the advantage of real estate being tangible, there’s really no comparison for the passive investor.

The math: Assuming a $50,000, 15-year investment in the passive opportunities we’ve discussed in this article:

• A mutual fund investment averaging 10% returns after fees ends up at a 7% net annualized return = Almost $138,000 after 15 years.

• Private lending investment with no fees averaging 12% net annualized return = Over $273,000 after 15 years.

• A turnkey rental property investment leveraging your $50,000 to buy $200,000 in real estate, averaging 6% in net annualized return after expenses and 3% annual appreciation of the asset = Over $431,000 after 15 years.

Whether you’re investing for your approaching retirement or beginning your passive income approach well ahead of time, passive investing is for anyone who seeks true financial peace of mind and passive income. If you had $10,000 month coming in passively, what would you be doing today? You don’t have to be an active real estate investor to achieve your goals — but you do need to find passive ways to direct some of your money into real estate.

By: Dani Lynn Robison

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