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Robinhood cuts losses after transaction revenue drops

wsj.com

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Re: Robinhood cuts losses after transaction revenue drops

#81

Post by [deleted] »

iepathos wrote: post #46
adoxyz wrote: post #2

Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.

Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.

[deleted]

Re: Robinhood cuts losses after transaction revenue drops

#82

Post by irjustin »

throwup wrote: post #29
irjustin wrote: post #13

What is this in the context of the wider market vs other Retail brokers? I don't think this is a knock against RH more a description of what's happening in main-street.

I certainly think it tells us something about RH. You don't see Vanguard or Fidelity losing a third of their userbase in a year.

> You don't see Vanguard or Fidelity losing a third of their userbase in a year.

I can't read the article, but you define "monthly active users" as a user exiting the platform i.e. pulling their money out?!

Originally, I had assumed it was "users who don't open the app/website" but expectation difference caused me to look it up:

> Robinhood defines a monthly active user as a "unique user who makes a debit card transaction, or who transitions between two different screens on a mobile device or loads a page in a web browser while logged into their account, at any point during the relevant month. A user need not satisfy these conditions on a recurring monthly basis or have a Funded Account to be included in MAU." [0]

I have a Vanguard, I haven't opened it in a month. By the above MAU definition, Vanguard lost me too.

Again, this _alone_ doesn't tell us that RH is doing poorly vs other Retail Brokers. They could be, but not enough info.

My take is - most people don't want to see their ultra red portfolio and are just not opening the app.

[0] https://www.fool.com/investing/2022/05/09/robinhood-losing-m...

Re: Robinhood cuts losses after transaction revenue drops

#83

Post by shrimpx »

2OEH8eoCRo0 wrote: post #70
conorcleary wrote: post #51

Earlier quoted context omitted.

Average down and buy the dip are real.

Someone I know kept averaging down and put in everything that he had as the dotcom bubble was bursting.

And did they hold a couple more years? Or for some reason they sold at bottom after averaging down?

Re: Robinhood cuts losses after transaction revenue drops

#84

Post by SamReidHughes »

kylehotchkiss wrote: post #5

If Robinhood had to close shop, who's a good broker to transfer holdings over to?

They have a big pile of cash, and at their current burn rate, they'll last for a long time. They have huge margins and their loss is from fixed cost R&D. They're receiving positive net deposits from a relatively young customer base and the total assets they have under management is growing.

To add some numbers: they're burning $175/quarter, which includes severance payouts from their recent layoff, on $6954 of assets, which includes a $6187 pile of cash. So that's 8.8 years of runway if they didn't cut costs or grow revenue further.

And their product also has a ton of room to improve -- once it gets IRAs, that would remove the main reason its more boring customers find other brokers.

Re: Robinhood cuts losses after transaction revenue drops

#86

Post by yrgulation »

adoxyz wrote: post #2

Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.

“In 2022, there were around 1.63 million software developers and software quality assurance (QA) workers employed in the United States.”.

I doubt its the tech layoffs that did it. Maybe the cost of leaving exploding led to less disposable income meaning less people willing to gamble. Also why risk your money when everything seems to be going under?

Re: Robinhood cuts losses after transaction revenue drops

#87

Post by yrgulation »

guelo wrote: post #71
iepathos wrote: post #46

Earlier quoted context omitted.

Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.

The unemployment rate was 3.5% months ago, there is a lag in government reporting. The rate can also vary greatly by industry, a laidoff software engineer is not going to be looking for McDonalds jobs.

Depends. Not everyone needs leet code programmers.

Re: Robinhood cuts losses after transaction revenue drops

#88

Post by whoopdeepoo »

hanoz wrote: post #77
twblalock wrote: post #61

Earlier quoted context omitted.

Stocks? Sure. But there is no reason crypto couldn’t go all the way to zero.

I daren't think of the number of stocks I've held which have gone all the way to zero over the years.

Just buy VOO

Re: Robinhood cuts losses after transaction revenue drops

#89

Post by legutierr »

eloff wrote: post #66
JohnJamesRambo wrote: post #64

Earlier quoted context omitted.

What a novel and original argument. Actually Bitcoin and Ethereum have a known supply and limited inflation (Ethereum is actually deflationary now) so best suited to not go to zero. The USD on the other hand… https://fred.stlouisfed.org/series/M2SL https://ultrasound.money/

With stocks, you're purchasing future profits. That puts a floor under things. With crypto you're purchasing??? There's no floor. It has limited utility.

Future profits of a public company can't go to zero? Bankruptcy is a thing, after all.

How much are Pan Am, Enron, Lehman Brothers worth today?

Re: Robinhood cuts losses after transaction revenue drops

#90

Post by whoopdeepoo »

throwaway12245 wrote: post #18
kylehotchkiss wrote: post #5

If Robinhood had to close shop, who's a good broker to transfer holdings over to?

Schwab or Vanguard. Vanguard pioneered the low cost index fund and Schwab was one of the original "discount brokers". Their innovations were adopted by every other broker, driving down costs for the small trader. They remain allies of small investors.

Vanguard outsourced most of their IT department overseas a few years ago. They certainly aren't allies of American IT workers
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