Robinhood Inc., the popular trading platform, recently reported a loss of $57 million due to a processing error in shares of a small company in December.
The mistake occurred when Robinhood mishandled a 1-for-25 reverse stock split by Cosmo Health, a nutriceuticals company with a market capitalization of approximately $50 million.
Robinhood Inc leaks earnings loss
Due to this error, Robinhood’s shareholders could trade shares they did not own, causing the company to hold a temporary short position in the stock. As Robinhood attempted to cover the short, the shares spiked, resulting in a loss.
On the day of the error, shares opened at $3.85 and rose as high as $23.84.
Source: https://crypto.news/robinhood-reports-57m-loss-on-processing-error/