The Blubber

Robinhood, HOOD, accidentally sold short on a stock and lost $57 million
2/10/2023

Robinhood, $HOOD, accidentally sold short on a stock and lost $57 million.

Cosmos Health, COSM, shares nearly tripled and experienced record trading volume more than seven times any previous day on Dec. 16.

In an earnings call, Robinhood Chief Executive Vlad Tenev noted a “processing error on a corporate action” that was “really disappointing,” leaving Chief Financial Officer Jason Warnick to spell it out.

“A processing error caused us to sell shares short into the market, and although it was detected quickly, it resulted in a loss of $57 million as we bought back these shares against a rising stock price,” Warnick said.

The stock gains didn’t last through that Monday, though — after reaching as high as $23.84 on the day that Robinhood was apparently buying, they lost it all in after-hours trading and headed even lower after Cosmos Health announced an equity offering.

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