Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Robinhood S-1 IPO

sec.gov

Post reply on HN
Print view View original

391–400 of 404 posts

Re: Robinhood S-1 IPO

#391

Post by gruez »

Judgmentality wrote: post #388
gruez wrote: post #385

Earlier quoted context omitted.

> What they did was illegal. Why would you not blame corporations for financial crimes? They stole money You think that what they did was illegal, but the person you initially replied to ( https://news.ycombinator.com/user?id=adabyron ) only said he "wasn't happy about it". That's not the same as "apologizing for theft". >but there is overwhelming evidence that I have personally witnessed so I already know for a fact…

He didn't just say he "wasn't happy about it," he also said "I don't blame them." You're right, it's not apologizing, but it's exoneration. I'm guessing you're aware of the trading halts in January and are arguing that's legal (or at least remain unconvinced it's illegal). Rather than have a long argument about whether or not brokers were legally entitled to restrict trading, I'll just concede as it really wasn't the…

> He didn't just say he "wasn't happy about it," he also said "I don't blame them." You're right, it's not apologizing, but it's exoneration.

Insofar as "I don't think they're guilty", yes. This is a slightly lower bar than "I think they're innocent", because the former covers cases where you're unsure. Maybe the person you replied to actually thinks robinhood is innocent beyond a reasonable doubt, but that can't be confirmed via his comments.

> I think of it more like when a cop gets away with murder in our legal system. Did he commit a crime? Well, technically no, because our legal system said so - but I still feel comfortable calling him a criminal

This analogy only works because you can presuppose that the cop is guilty. It breaks down when you can't. For instance if you only knew that he shot and killed someone. Maybe he acted in self defense (the actual kind).

My understanding of the situation was that robinhood was forced to restrict trading for meme stocks due to increased deposit requirements on them. If they couldn't come up with money to meet deposit requirements (due on the day of trade), then they have to halt trading. Meme stocks like GME had disproportionately higher deposit requirements, so restricting those stocks would allow them to continue operating with the smallest impact. If those stocks weren't restricted, they would have burned through their cash/credit they had (to meet deposit requirements) and would have to halt trading anyways.

Now, this is what robinhood is claiming, and I can't verify every single detail of this story (although some elements were independently confirmed, like the deposit requirements going up). Maybe robinhood had a boatload of cash/credit on hand and could have easily met the day/week's trading volume, or maybe it would have been close and they didn't want to risk it, but you think they should have went ahead anyways. In any case, the whole situation is less clear cut than the standard villain narrative of "they shut down trading because the hedge funds told them to". More importantly, there's enough wiggle room for differences of opinion that if someone says "I can't blame robinhood", you don't have to immediately accuse them of "willfully absolving others of guilt".

Re: Robinhood S-1 IPO

#392

Post by randomhodler84 »

dilyevsky wrote: post #390
randomhodler84 wrote: post #266

Earlier quoted context omitted.

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.

Managing your own penny stock index is great if your time is worth nothing to you. But also IB had pretty low fees for years and CS had no fees on ETFs

“Time” — this thread is about Rh, and it’s probably the quickest way. We are talking total time of a few hours. Arrange by price, buy, swipe. It’s about having systems in place that provide yield.

Re: Robinhood S-1 IPO

#393

Post by Judgmentality »

gruez wrote: post #391
Judgmentality wrote: post #388

Earlier quoted context omitted.

He didn't just say he "wasn't happy about it," he also said "I don't blame them." You're right, it's not apologizing, but it's exoneration. I'm guessing you're aware of the trading halts in January and are arguing that's legal (or at least remain unconvinced it's illegal). Rather than have a long argument about whether or not brokers were legally entitled to restrict trading, I'll just concede as it really wasn't the…

> He didn't just say he "wasn't happy about it," he also said "I don't blame them." You're right, it's not apologizing, but it's exoneration. Insofar as "I don't think they're guilty", yes. This is a slightly lower bar than "I think they're innocent", because the former covers cases where you're unsure. Maybe the person you replied to actually thinks robinhood is innocent beyond a reasonable doubt, but that can't be…

Your understanding of the situation is pretty good. I actually believe that Robinhood had to halt trading due to margin requirements, however that's leaving out a lot of context.

Immediately after halting trading, Robinhood's initial public statement was "we have full liquidity for any event and that is not the problem." This is where it starts to become fraudulent, because that contradicts what they later said. Timelines matter, details matter, and you are correct that the court of law has its place for this sort of thing. I'm convinced they were willfully lying at this point, but it would take a long time to explain why in a convincing manner (so I don't blame you for not believing me here).

Now afterwards is when shit gets weirder, but the GME rabbit hole is really deep and the signal to noise ratio is atrocious. There is some good data from Robinhood's S1 filing though. For their transaction-based business, Citadel made up 27% of their revenue - which is significantly higher than anyone else. And last quarter 81% of Robinhood's revenue was for PFOF, payment for order flow.

I agree with you this should go to court and I look forward to it. I could provide you with plenty more data and evidence, but it's lots of little pieces and admittedly a lot of it is circumstantial. In other words, I'm doing a shitty job explaining my side and you don't have much reason to believe me.

I owe you and the person I originally responded to an apology.

Re: Robinhood S-1 IPO

#394

Post by bumblelad »

tptacek wrote: post #332
bumblelad wrote: post #321

Earlier quoted context omitted.

You can skim the S-1 and see why that is problematic. In 2020, 34% of their revenue came from Citadel. 75% of their entire revenue stream comes from forwarding their clients' orders to one of FOUR market makers like Citadel. This practice in and of itself is contentious, and they readily admit this in their risk factors section of the filing. They also readily acknowledge the absolute thrashing they would receive fin…

Is your suggestion that PFOF is "contentious"? Because practically all retail traders are customers of brokers that get rebated for sending trades to firms like Citadel. Even IB does on their normal plans. Message board people believe a lot of weird things about how markets work.

It's contentious in the sense that there's a non-zero probability that the SEC could step in and ban that practice, which is something that Robinhood outlines in their S-1 filing under the risks section.

>Message board people believe a lot of weird things about how markets work.

Message board people also love reading comments and not looking at the articles they're typically commenting about.

Re: Robinhood S-1 IPO

#395

Post by bmlzootown »

tayo42 wrote: post #274
_qbjt wrote: post #161

Earlier quoted context omitted.

I feel like the only person who actually likes the Fidelity app. Sure, it's not visually attractive like Robinhood but the amount of information you get is far greater. Also the iOS app works on both my iPhone and iPad whereas Robinhood only renders the phone view on iPad. The app even has proper support for the Magic Keyboard so cursor interactions work the way they should on iPadOS. Fidelity definitely has a "boome…

I like fidelity's app and website. Making complex trades on a phone doesn't make sense I think anyway. It's like programming on a phone, if you want to do anything serious use a computer.

The line between the two are blurring further every day, though. Might not be that far off in the future when they're actually interchangeable.

Re: Robinhood S-1 IPO

#396

Post by [deleted] »

bumblelad wrote: post #394
tptacek wrote: post #332

Earlier quoted context omitted.

Is your suggestion that PFOF is "contentious"? Because practically all retail traders are customers of brokers that get rebated for sending trades to firms like Citadel. Even IB does on their normal plans. Message board people believe a lot of weird things about how markets work.

It's contentious in the sense that there's a non-zero probability that the SEC could step in and ban that practice, which is something that Robinhood outlines in their S-1 filing under the risks section. >Message board people believe a lot of weird things about how markets work. Message board people also love reading comments and not looking at the articles they're typically commenting about.

[deleted]

Re: Robinhood S-1 IPO

#397

Post by np_tedious »

gruez wrote: post #318
kasey_junk wrote: post #281

Earlier quoted context omitted.

https://blog.robinhood.com/news/2018/10/9/introducing-cleari... Robinhood has been self clearing for years before the GME incident

Right, but that just means whatever problems that the clearinghouse was experiencing (they're not just doing it willy-nilly) is passed to robinhood directly.

Yeah, I should've said DTCC in robinhood case. Thanks for correcting me, GP. I should've remembered this from the tax statements changing

Re: Robinhood S-1 IPO

#398

Post by lottin »

gruez wrote: post #387
lottin wrote: post #386

Earlier quoted context omitted.

Well, yes. The average daily trading volume in the US bond market is in the order of 0.8-1.0 trillion, which means 4 trillion over a span of several months is nothing. Inflation doesn't come about as a result of the Fed pumping asset prices up, this is a misunderstanding on your part. It comes about, at least in theory, as a consequence of lower nominal interest rates.

>Well, yes. The average daily trading volume in the US bond market is in the order of 0.8-1.0 trillion, which means 4 trillion over a span of several months is nothing. I was talking about 4 trillion net . In other words, 4 trillion dollars worth of outflows . 1 trillion dollars worth of trades per day doesn't tell much because it could very well be people selling bonds and then buying other bonds. On the other hand,…

Your question was whether bond holders who sold bonds to the Fed would have been able to sell those bonds had the Fed not bought them as part of its 4 trillion bond purchasing program. And the answer is that, considering the average daily trading volume in the US bond market, which is a little under 1 trillion, whatever liquidity the 4 trillion Fed program provided, it couldn't possibly have made a big difference.

Now you're making a different claim which is that the Fed inflated asset prices by pumping up the bond market. Yes, bond purchases by the Fed will tend to make bond prices increase, but your math is nonsense. Buying 9% of the supply of something doesn't mean the price will go up by 9%. This is not how prices work. Whether the Fed pumped up the bond market is an empirical question, which should be answered by looking at bond prices and seeing if they went up during 2020. So where's the data showing that bond prices were pumped up?

Re: Robinhood S-1 IPO

#399

Post by tayo42 »

bmlzootown wrote: post #395
tayo42 wrote: post #274

Earlier quoted context omitted.

I like fidelity's app and website. Making complex trades on a phone doesn't make sense I think anyway. It's like programming on a phone, if you want to do anything serious use a computer.

The line between the two are blurring further every day, though. Might not be that far off in the future when they're actually interchangeable.

Hmm I'm not sure, the problem with phones is the screen size. Just getting enough information on a screen is difficult then intuitively managing it. Even a tablet might struggle.

Re: Robinhood S-1 IPO

#400

Post by RustyConsul »

trompetenaccoun wrote: post #357
gruez wrote: post #317

Earlier quoted context omitted.

No, the parent poster is remarking how gp is willing to jump through so many hoops to reopen his robinhood account, that must mean people really like it. Therefore, its a good company to invest in.

That proves it then, what could go wrong... On a more serious note the investing and fintech market is incredibly dynamic and competitive. Robinhood is popular because it has big shark backers who successfully convinced many young people that trades are free, even though the cost is just hidden elsewhere. Which more and more slowly come to realize. The whole brokerage market has the potential to be shaken up badly by…

Robinhood's model is different from the rest of the trading firms. Since they take ownership and find a liquidity maker post-trade, it would make them particularly adept at handling crypto trades that have very large spreads. Think of them as an additional vampiric layer ontop of retail trades instead of charging for each trade. They'll soon be eating coinbases massive lunch. I'll definitely invest in them, even if they are a shitty company.

The modern era of investment is kinda weird.

Post reply on HN