The Wall Street Journal writes, "Robinhood's Cash Riches Pay Off." They explain, "Rising rates are helping Robinhood Markets survive slow markets. There's still more to be done to truly thrive again.... Efforts to gather customer cash are also bearing fruit. Robinhood said that it has swept up about $1.5 billion worth of customer cash via its Gold accounts since it raised the rate for those customers to 3% in September. Cash sweeps, which move uninvested customer money to program banks, generated $8 million in third-quarter net interest revenue, up from just $2 million in the second quarter." They tell us, "Overall, net customer deposits into Robinhood grew at a 17% annualized rate in the third quarter. It also generated $20 million in net interest revenue from segregated customer cash and clearinghouse deposits." The update adds, "Investors shouldn't get carried away, though. A portion of Robinhood's interest revenue doesn't come directly from customer activities but from its own corporate cash pile. Robinhood has more than $6 billion worth on its balance sheet, which generated $29 million in net interest revenue or more than a fifth of its total net interest revenue. That is a good way to help Robinhood on its path to profitability, but it doesn't necessarily represent deepening relationships with customers for investing and money management. Gathering cash is often a means to an end: Getting people to do something with it. Otherwise, in this environment it is just a competition for who can offer customers the highest rates. And, in a less-upbeat sign, Robinhood says activity in margin borrowing and securities lending by customers is slowing so far in the fourth quarter."

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