How does a brokerage firm mention to lose large amounts of money e.g Robinhood

Z

zdreg

How does a broker e.g. Robinhood that has no physical branch offices and makes money only off trade execution and customer account balances lose large sums of money?
 
ie Broker Robinhood can continue to survive.

and customers who lost a large sum of money will quit.

So Robinhood must continue to look for new customers.
 
~2,400 employees in CA.
2,400 x $30/hr x 40 hrs./wk. x 52 weeks = $149,760,000 per year in wage expenses
***Wage # is just a guess.
CEO salary?
Board/management salary?
Office building rent in Menlo,CA?
Fees to operate as a broker?
I don't know all the numbers but they need a good amount of income to pay expenses.
 
It is a good question. The same with all those crypto brokers, now that crypto is not going up, suddenly all of them are losing money.

The business model is probably bad, they charge too little or their spread is to narrow.

Anyhow, Robinhood's numbers:

https://www.businessofapps.com/data/robinhood-statistics/

Or we could just ask the net:

Why is Robinhood losing so much money?

Robinhood's costs during the fourth quarter increased 162% from the previous year, contributing to the company's net loss. On a call with reporters, Robinhood Chief Financial Officer Jason Warnick attributed much of the costs to share-based compensation and increasing headcount.Jan 27, 2022

Furthermore:

https://seekingalpha.com/article/4505714-robinhoods-hood-stock-slow-demise
 
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zdreg said:
What are those 2400 employees doing? This is private industry and not the government we are talking about.
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That's what Musk asked of TWTR when they had 7,500 employees so now they have ~2,000. :-)
HOOD has been reducing employees this past year.
 
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