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Robinhood reports 43% revenue decline

wsj.com

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Re: Robinhood reports 43% revenue decline

#121

Post by bredren »

Denvercoder9 wrote: post #101
BigBubbleButt wrote: post #98

Earlier quoted context omitted.

> The GME situation got into a "sold out" situation. Much like how a toy-store runs out of Furbies back in the 90s, Robinhood ran out of GME-stock to sell to its customers. This is a poor analogy. So long as there is a large enough float, which is a requirement to be listed on some exchanges, there should always be stock to buy and sell. Don't compare it to something else that's commonplace and misleading. I am aware…

It's not that bad of an analogy. When a toy store runs out of Furbies, that doesn't mean there's no Furbies available on the world market anymore. It just means that at that specific toy store you can't get any Furbies anymore. When they get resupplied (posted additional collateral, in the case of Robin Hood), you can buy from them again.

Unrelated, but when Furbies came out, my brother and I waited in line for some and we both got one.

I had a furry white one and it was awesome.

Re: Robinhood reports 43% revenue decline

#122

Post by gm3dmo »

jasode wrote: post #24
ryanmcbride wrote: post #2

I feel like regardless of the reasons they did it, whether or not it was necessary, they lost a lot of good faith with the users when they locked the GME and crypto trading during that whole thing. I have no idea how necessary their actions were but regardless of its necessity it still cost a lot of user good will.

>I have no idea how necessary their actions were It was financially unavoidable for Robinhood because they didn't have the _extra_ billions$ in collateral deposited at the clearinghouse to back up their customers' trades (e.g. GME). Various stories about it having to raise extra billions in an emergency: https://www.google.com/search?q=robinhood+emergency+raise+bi... But retail traders (not the professional traders l…

> so the easier narrative to believe is that Robinhood was part of a conspiracy theory to screw the little guy.

Do Robinhood have big guys as customers?

Their name suggests they should serve the little guy. If they cannot do that, then there is no reason for little guys to use them.

Re: Robinhood reports 43% revenue decline

#123

Post by parkingrift »

ryanmcbride wrote: post #2

I feel like regardless of the reasons they did it, whether or not it was necessary, they lost a lot of good faith with the users when they locked the GME and crypto trading during that whole thing. I have no idea how necessary their actions were but regardless of its necessity it still cost a lot of user good will.

I understand why they did, and why they had to do it. And I still don't care. I liquidated my RH positions and left the platform forever. Unfair is unfair.

Re: Robinhood reports 43% revenue decline

#124

Post by dragontamer »

BigBubbleButt wrote: post #111
dragontamer wrote: post #105

Earlier quoted context omitted.

Personally speaking, I blame the customers. They are paying for $0 trades to a very, very small trading firm with well-known trade-execution problems months / years before the GME instance. No serious trader actually trusted Robinhood, and nobody was surprised when Robinhood's trading ability was shown to be so weak in that timeframe. There were many respectable banks with much stronger finances who were able to supp…

> Except they do. All the time when bubbles pop and other crisis form. Market halts are completely different from what we are discussing. And one of the purposes of market makers is to provide liquidity in extreme cases as you are describing (I'm not saying it works perfectly, but it's one of their reasons for existing). Anyway, I feel like we aren't quite getting our points across to each other. Not blaming you just…

> Market halts are completely different from what we are discussing

I'm not talking about market halts. I'm saying when all the buy-orders vanish from the marketplace, it results in a "flash crash". Hitting the "sell" button will do really weird things at these times.

After all, a "sell" can only mechanically happen if the market pairs you up with a "buy". That's just how the stock market works. If there's no buyers, you can't sell, even if you're hitting the "sell" button.

Re: Robinhood reports 43% revenue decline

#125

Post by mirceal »

PragmaticPulp wrote: post #41
ryanmcbride wrote: post #2

I feel like regardless of the reasons they did it, whether or not it was necessary, they lost a lot of good faith with the users when they locked the GME and crypto trading during that whole thing. I have no idea how necessary their actions were but regardless of its necessity it still cost a lot of user good will.

I would be shocked if the GME / Reddit crowd made up more than a few percent of that decline. Robinhood has a lot of users across a lot of demographics. Reddit, however large, is more of a small microcosm of internet culture. I think it's more likely that Robinhood's rapid rise was fueled by COVID boredom and a wonky stock market where it felt like everyone was getting rich from stocks and options. Now that the marke…

I would not be shocked.

We need to consider who would use Robinhood to begin with and how likely are they to know be exposed to the whole GME saga.

Personally I stopped using it. Had it for trying out new things / prototyping crazy ideas (yeah yeah disposable income and first world problems I now). From that point on I am using only a legit broker. When I want to trade I want to be able to trade. If you as a broker cannot do that - even under weird conditions - I will NOT use you.

Also, at a meta level, the problem is that RH massaged the truth and didn’t straight up explain what was going on. If they did the right thing in keeping everyone in the loop this could have been a golden opportunity to consolidate their position.

Re: Robinhood reports 43% revenue decline

#126

Post by zydex »

werber wrote: post #116

I used the app briefly during the Gamestop hype, and am not a savvy investor by any means. But the press circus surrounding it in the aftermath made me feel like I had used an online slot machine not an investing application.

In my opinion it's closer to the former rather than the latter.

Re: Robinhood reports 43% revenue decline

#127

Post by mirceal »

blahblah123456 wrote: post #35
autosharp wrote: post #14

Earlier quoted context omitted.

At first I assumed it was because of liquidity problems and not because they wanted to screw customers. But in the hearings later he refused to answer a bunch of easy questions. E.g. the following meme is literally what he said: https://www.reddit.com/r/wallstreetbets/comments/lngem6/do_y... Q: "Do you realize that you literally manipulated the market. Yes or No?" Vlad: "Thank you for the great question. When I was a…

Nah, not true. In a legal proceeding, always say the minimum. It's never to your benefit to talk to law enforcement (or congress in this case).

forget legal proceedings. If RH did the right thing AND was transparent with their users there wouldn’t have been any legal proceedings

Re: Robinhood reports 43% revenue decline

#128

Post by mirceal »

andrewgioia wrote: post #96
ryanmcbride wrote: post #2

I feel like regardless of the reasons they did it, whether or not it was necessary, they lost a lot of good faith with the users when they locked the GME and crypto trading during that whole thing. I have no idea how necessary their actions were but regardless of its necessity it still cost a lot of user good will.

Whether it was right for them to do or not, I left their platform because of it paying their ridiculous $79 transfer fee or whatever it was. Now with Fidelity and have recommended them 3 times since I've switched.

Fidelity is the one I also use and recommended. The other one is maybe Schwab but the rest of them are 50 shades of Robinhood. If anyone else knows other serious, professional brokers do correct me.

Re: Robinhood reports 43% revenue decline

#129

Post by Fomite »

gm3dmo wrote: post #122
jasode wrote: post #24

Earlier quoted context omitted.

>I have no idea how necessary their actions were It was financially unavoidable for Robinhood because they didn't have the _extra_ billions$ in collateral deposited at the clearinghouse to back up their customers' trades (e.g. GME). Various stories about it having to raise extra billions in an emergency: https://www.google.com/search?q=robinhood+emergency+raise+bi... But retail traders (not the professional traders l…

> so the easier narrative to believe is that Robinhood was part of a conspiracy theory to screw the little guy. Do Robinhood have big guys as customers? Their name suggests they should serve the little guy. If they cannot do that, then there is no reason for little guys to use them.

They market themselves as helping and serving the little guy, because of their commission-free trades.

As with most things that are free, one needs to realize that if you're not the customer, you're the product. Robinhood makes its money on the interest in customer's accounts, margin lending, and selling trade data to high frequency traders.

Only one of those is "little guy" neutral - margin lending is extremely dangerous for inexperienced investors, and HFTs aren't the little guy.

Re: Robinhood reports 43% revenue decline

#130

Post by ranma4703 »

dillondoyle wrote: post #91
bombcar wrote: post #3

Much of what Robinhood actually added (an app) has been mimicked and copied by actual brokerages. And having your investment platform be basically synonymous with wallstreetbets isn’t that great.

Seems correct. Looking at the scwhab 2020 pdf i could find quickly they added ~4.6mm new brokerage accounts between 19 and 20. Wonder what the recent stats are. Article says robinhood lost 1.8mm if i'm reading correct. Fits my use. I did a small amount on robinhood when i first came out. Now have that small pot for active trading (compared to people here i'm sure) in schwab. I am also considering moving the larger sa…

actively trading is a great way to lose money. You're gambling against the house, and you will lose. Put money in mutual funds and leave it there if you want to invest, go put your money on black or red if you wanna gamble
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