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Robinhood S-1 IPO

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Re: Robinhood S-1 IPO

#261
post #188

Earlier quoted context omitted.

Imagine a market of 1,000 people. If we add 5,000 who significantly under- or overvalue, or make other errors, the good being traded, is that more efficient? In terms of economic efficiency, if that's what we mean, I would guess not: It causes the misallocation of capital to worse investments. Was the Gamestop market economically efficient?

You are making the assumption that the first 1000 people somehow had a better way to value the assets being trading than the next group that joins the trade. This is a fallacy as the market sets the prices on its own. No by efficiency I mean the spread and incorporation of more information relating to the underlying asset, making it more closely match their fair value, and the resulting tightening of the spread and r…

> I mean the spread and incorporation of more information relating to the underlying asset, making it more closely match their fair value

The Internet isn't so great at spreading information; it is incredible at disinformation and misinformation.

Re: Robinhood S-1 IPO

#262

Headline 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%

The 3 months ended 2021 are even more impressive. They have already made ~500mn in 2021. This is a rocket ship

Re: Robinhood S-1 IPO

#263

Earlier quoted context omitted.

So much for that media narrative of rh being hurt by bad press about gamestop. Rh is still hugely popular

Well, said bad press was in 2021 so any effects have yet to be seen.

You should see their 2021 numbers. They are growing faster.

Re: Robinhood S-1 IPO

#264

They went from 170MM in revenue in 2019 to 720MM in revenue in 2020. Wow will that be a temporary spike or sustained?

3 months ending 2021, they have already made ~500mn. This is sustained rocket ship

Re: Robinhood S-1 IPO

#265
post #48

I 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…

“Democratizing” day trading is just putting undereducated and underinformed victims in front of professionals with orders of magnitude more access to research, information, and market access. I said it elsewhere but this would be like praising Harrah’s for removing the rake (the casino’s cut) from poker games and encouraging novices to put their money down on the table with Vegas professionals. People would be mortified, but that’s astonishingly close to what’s happening here. Nobody would think this is a good idea, despite the existence of wealthy and successful poker players.

We don’t give Robinhood crap because it’s “not sophisticated enough”. We do so because they have removed the guard rails, encouraged the some of the riskiest possible behavior (with a particularly poor risk:reward ratio), abrogated any responsibility of steering their users toward financial literacy or sound investing practices, and done all of this toward one of the most vulnerable classes of market participants.

Day trading is not investing. It is to investing as predicting the weather is to predicting the climate. Getting masses of lay people “comfortable” with day trading is—frankly—unmitigated evil. It is a means by which the rich will get richer and the poor will have their money fleeced. The only reason this hasn’t unfolded in complete disaster yet is the absolutely unprecedented bull market we’ve been in. It will end—nobody knows when—but when it does, Robinhood’s customers will be amongst the worst off.

We know this because repeated evidence has proven conclusively that one’s market returns are (on average) inversely proportional to the number of trades one makes. Buying and selling in the short-term maximizes the asymmetry between you and better-informed market participants. Buy-and-hold minimizes this, but that’s not even remotely what Robinhood promotes. Vanguard on the other hand actually did democratize long-term buy and hold investing, which is what we should be steering lay people towards.

Re: Robinhood S-1 IPO

#266

Earlier quoted context omitted.

I really don’t understand this “democratizing” thing. In Spain, banks have allowed to trade on all kinds of assets for ages. Some with low fees. If you wanted to buy a certain asset you could do so in like three clicks. In the US I know as a fact that some banks like Charles Schwab have also made retail investing accessible for ages… Robin Hood has “democratized” trading in the sense of aggressively expanding it thro…

CS had like $9 fee per trade before they felt the heat from RH. Which btw was fine by me since it was small potatoes if you just casually invest and hold for a year or longer. What they really democratized is incessant day-trading, otm calls on dogshit stocks etc. basically a casino pretending to be a brokerage

It was never ok. Trade fees were a gatekeeping measure to dissuade retail investors. Since RH started I have been able to build a portfolio of many single individual stocks (my own market “index fund”), some worth less than $10. This was never possible under pay per trade regime.

Re: Robinhood S-1 IPO

#267
post #248

Earlier quoted context omitted.

yea - everytime I try to explain to peers and family what the price of free is, deaf ears.

It’s better than free, you get a discount relative to NBBO.

The higher-level argument might be that if PFOF didn't exist, NBBO might be better. If Citadel et al wanted to make markets they'd have to publish their prices.

(Of course, that gets rid of the "market segmentation" signals, so it'd probably make life a little better for institutions and make life a little worse for individuals, on net. No doubt smart people could disagree about how much of each effect there would be.)

Re: Robinhood S-1 IPO

#268

Earlier quoted context omitted.

I understand that Robinhood sells order flow and that you may get a worse fill because of it, but is the average Robinhood user getting 3 cents of slippage on their order of 1 share of Ford worse than a $10 round trip in order fees from a more premium broker on the same trade? I think the order flow model is better for most retail traders. Obviously, if you're buying $20k in stock at a time, paying the fees will be b…

Everyone sells order flow. It’s: do you want sale of your order flow to be the only fee you pay or do you want to pay commissions on top of that, too?

That’s not true. Fidelity does not receive pfof.

Re: Robinhood S-1 IPO

#269
post #75

The Chief Legal Officer, Daniel Gallagher, made $30M this year. It breaks down into $257k cash, $4.2M bonus and $25.5M in stocks and options. This is a far larger amount than any other executive. In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC (Securities and Exchange _Commission_), the highest role of the SEC, appointed by the US President. He was hired by Robinhood in May 2020, and his previous j…

yeah basically every obama official now works in big tech.

but somehow people think only republicans are corrupt. the biggest companies are chock full of obama staffers.

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