Robinhood Red Flags

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dealmaker

Robinhood Red Flags

Is the stock-buying app Robinhood to be lumped in with overvalued, actually-low-margin startups such as WeWork and Uber? Red flags include a series of missteps such as Robinhood's bungled 3%-interest savings product, strong competition from other brokerages that are also promising free stock trades, and the lack of clarity around how the firm plans to turn a profit. Fortune
 
The article also states “Robinhood has “a very strong balance sheet” and that the “vast majority” of the money it raised is untouched.”


This looks much different from WeWork.
No one knows whether Robinhood is actually profitable, probably not, but they don’t raise billions to acquire other companies and spend money like WeWork did.
For now Robinhood is still riding on its startup status and potential for additional innovation and disruptions.

They could also be an acquisition target, even potentially by Google that right now is following in its footsteps and getting into banking.
Either way, none of this matters, the founders are getting richer and that was the plan. Laughing at them will not suddenly make them poorer, so they’ve already won.
And if you look at Amazon starting as a book store, and Google as a simple search engine (and their initial stock price) - you can’t really laugh too hard.
 
Maverick2608 said:
I cannot come up with one single argument for choosing Robinhood.
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Not anymore, but where else could you open an option account with $500 without lying about your personal worth? And they used to be the only one with no commission.
 
Maverick2608 said:
I cannot come up with one single argument for choosing Robinhood. Despite this they've now got 10 million accounts.

https://www.forbes.com/sites/donnaf...s-more-than-10-million-accounts/#4d644f0d3f81
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It is the cool place for millennials.

Pictures of the founders
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millennials want to be in a place where people look like themselves and understand their lifestyle.
 
zdreg said:
It is the cool place for millennials.

Pictures of the founders
View attachment 214700
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millennials want to be in a place where people look like themselves and understand their lifestyle.
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This is sort of true, but not really. If it was Col Sanders and they still made RH, people would use it.

RH is the gamifaction of investing. This is a good thing. IMO, RobinHood will be bought out OR a new CTO will be brought in because who the fuck makes such rookie mistakes over and over besides people who are learning for the first time.

If the founders have good advisors, those advisors would still be pushing for an IPO but they really need to stop being on /r/wallstreetbets every week with yet another hack and be clean for at least 6 months before they can IPO.

Think about it: if RH was exactly as it is, without the idiot portfolio risk code, it would be a great IPO. I would 100% buy.

RH has a chance to be one of the most successful IPOs in recent history if they stop fucking it up.
 
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