its crazy how the CFO and CLO total compensation were 18m and 30m respectively.
Robinhood S-1 IPO
221–230 of 404 posts
Re: Robinhood S-1 IPO
#222Earlier quoted context omitted.
Index funds democratized investing. Robinhood “democratized” the worst part of investing and exposed unsophisticated investors to the instruments they are most likely to underperform on. Individual stock picking is probably worse than indexes but fine, however the incentive to day trade or trade complex derivatives is almost certainly going to hurt people far more often than a Vanguard account. It’s not a coincidence…
When you say "It’s awful at order execution, so you get worst prices on things." What does "worst price" represent? How do you get a "Worst price" than anywhere else?
Robinhood sells to/executes orders through high frequency trading firms like Citadel and (I think) Two Sigma. Because Robinhood isn't connected directly to, say, the NYSE, these HFT firms essentially buy the security and sell it to you for a slightly higher price. TBF, other companies do this too; like, TD Ameritrade, Schwab and E*Trade.
Re: Robinhood S-1 IPO
#223Per-user revenue was $109 for 2020. My goodness payment for order flow and cryptocurrency rebates are lucrative.
Just like "no fee" money exchanges in airports with huge spreads. Same business but internet scale and with the new hype of investing.
Though, to be fair, Robinhood offers reasonably spreads.
They must execute client orders at a price as good as or better than the national best bid offer, if I understand correctly (Reg NMS [1]). Now, the firms that buy that order flow offer better (tighter) prices, an improvement over the NBBO, and what Robinhood does is take a cut of that improvement.
(Robinhood takes a larger cut than other brokers, fair enough, but those other brokers used to charge an additional flat fee. So, for small orders, you're better off with Robinhood, for large orders you're better off with a different broker. Note that this was the behaviour that triggered regulatory action a while ago, and the situation might look different now, given that other brokers also offer trades without commission. Either way, you should get executed at NBBO or better.)
Re: Robinhood S-1 IPO
#224Headline financials: FY Ended December 31, in millions except percentage and assets per user | 2019 | 2020 | YoY ---------------|--------|--------|------- revenue | $278 | $959 | 245% op ex | $384 | $945 | 146% net income | $(107) | $7 | (107)% assets held | 14,136 | 62,979 | 346% monthly users | 4.3 | 11.7 | 172% assets per user| 3,287 | 5,382 | 64%
Also the cash - liabilities calculus not looking good. $8.8B in cash - $7.7B in liabilties = - $1.1 billion I'll pass.
I'm curious why this alone is such a problem? This is substantially better than many other companies at IPO.
Re: Robinhood S-1 IPO
#225$1 billion in top line revenue in 2020. Wow.
Pretty sure they're counting any crypto bought as revenue, which seems highly misleading.
Are they counting any stock purchased as revenue too? I don't understand the justification for that accounting at all. The profit on any transaction for them is 0 dollars, unless they're skimming on spreads or frontrunning or something else scammy.
Square does this as well, which is how they got "200%" revenue growth.
Correct me if I'm wrong.
Re: Robinhood S-1 IPO
#226Earlier quoted context omitted.
Index funds democratized investing. Robinhood “democratized” the worst part of investing and exposed unsophisticated investors to the instruments they are most likely to underperform on. Individual stock picking is probably worse than indexes but fine, however the incentive to day trade or trade complex derivatives is almost certainly going to hurt people far more often than a Vanguard account. It’s not a coincidence…
>Source? Not a single investigation other than the word of Robinhood CEO I'd welcome an investigation, but based on the rest of your comment ("apologists", "only a naive fool would accept the explanation given") my guess is that your mind is already made up.
Looks like it might be happening. Robinhood’s CEO’s phone has been seized: https://www.vice.com/en/article/wx5p8z/feds-seized-robinhood...
Re: Robinhood S-1 IPO
#227Re: Robinhood S-1 IPO
#228They went from 170MM in revenue in 2019 to 720MM in revenue in 2020. Wow will that be a temporary spike or sustained?
They count crypto sold as revenue. So that number is very misleading
Re: Robinhood S-1 IPO
#229I understand that many give Robinhood crap because it is not "sophisticated enough" or because of the Gamestop fiasco. Although many startups like to claim that they are "democratizing [x]", I honestly believe they did it. I have many friends that never traded before, and after they got their Robinhood account they feel comfortable enough to do it often. Even myself, who used to only trade a couple of times a year, s…
> Even myself, who used to only trade a couple of times a year, started with $300 in my Robinhood account a few years back. Now I have at least ~60k that I rotate around in my Robinhood account on a daily/weekly basis. I don’t think trading more stocks and trading them more frequently is a “better” or even “democratized” outcome. For the vast majority of people trading more shares more often is an objectively terribl…
Democratization is not about making the correct decision or investment strategy. It is about your freedom and ability to make decisions. Robinhood allowed people the choice to buy, sell or not do either, daily easily and from anywhere. That is democratization.
Re: Robinhood S-1 IPO
#230“ A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected. For the three months ended March…
I find it interesting that Elon Musk has tweeted about Dogecoin several times in the past day, and his tweets no longer seem to be causing price spikes. A lot of Cryptocurrency twitter is mad at him for his actions and statements on Bitcoin, I wonder if that has broken his ability to manipulate price with tweets. If that's the case, probably a bad thing for Robinhood. But maybe people will come back around to him wit…
At this point a Musk tweet is likely priced into the asset