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Illustration: Sarah Grillo/Axios

Robinhood continues to come under pressure from power users and politicians, but its investors are doubling, tripling and maybe even quadrupling down.

Driving the news: The stock trading app yesterday announced $2.4 billion in new funding from existing backers, on top of the $1 billion it secured last Friday.

From the outside, Robinhood appeared to be on fire.

  • Days of sloppy messaging and stubborn reticence to explain that its West Coast executives were awakened at around 3 a.m. PT on Thursday morning with word that the company would need to put up around a $3 billion deposit to open full trading — an amount the company either couldn't afford or that its compliance team wouldn't let it risk.

But from the inside, Robinhood investors believe the company pulled off a miracle.

  • Things were indeed frantic, particularly in the early hours of negotiation with clearinghouse number-crunchers.
  • But investors argue: The app kept working under unprecedented usage. No data was lost. Trading did open, albeit without purchase ability on the handful of nostalgia stocks. And Robinhood quickly called down its credit lines and raised what it believes is enough money to avoid this sort of problem in the future — first tapping VC firms closest to the company (for the initial $1b) and then expanding the circle to all existing investors.
  • The $3.4 billion was structured as a convertible note, although terms haven’t been disclosed. Reuters also reports that Robinhood already is seeking to secure a new $1 billion credit line.
  • Robinhood has been at or near the top of the app store for days, likely replacing any departed users many times over.

What they're saying: “If you’d asked me a week ago if it was possible to do all of this stuff in 72 hours, I’d have told you no way,” one investor tells Axios. “It’s easy to shit on [CEO Vlad Tenev] for how he said things in a TV interview, but behind the scenes he and everyone else really delivered.”

  • Another investor adds: “I really believe everyone was trying to do the right thing under unprecedented circumstances… The question [for investors] was if they’d earned the right to be around the next day, and obviously we felt the answer was yes.”

Investors don't appear worried about legal or regulatory changes that would significantly harm Robinhood's business model. Not only via conversations with Axios, but as evidenced by the $3.4 billion in new disbursements.

  • Tenev is expected to testify at a House Financial Services Committee hearing on Feb. 18.
  • "Axios Re:Cap" today will speak with the ranking Republican on that committee, Rep. Patrick McHenry (R-N.C.). Subscribe.

The bottom line: From the perspective of its investors, this past week may go down as Robinhood's defining moment instead of as its deleterious one.

Go deeper

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A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.

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France has taken the extraordinary step of recalling its ambassadors to the U.S. and Australia after both countries blindsided their French allies with a new military pact and submarine contract, the French Foreign Ministry announced on Friday.

The backstory: While sealing an agreement with the U.S. and U.K. to acquire nuclear submarines, Australia ripped up an existing $90 billion submarine deal with France. That led senior French officials to accuse the U.S. of a "stab in the back."

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A U.S. drone strike launched on Aug. 29 killed 10 civilians in Afghanistan, including seven children, rather than the Islamic State extremists the Biden administration claimed it targeted, the Pentagon said Friday.

Why it matters: U.S. Central Command said at the time that officials "know" the drone strike "disrupted an imminent ISIS-K threat" to Kabul's airport, and that they were "confident we successfully hit the target."