Robinhood stock as a long term investment
Thesis: Current generation loves it, even the ones who claim to hate it due to GME debacle use it. The oldies (boomers) who don’t, are on a downward slope (a sharp one) of % of wealth held by generation. With the latest features (IRA/401k) Hood is looking to transition away from being a meme stock battleground to a serious player. They stopped losing money in 2023 q2 and q4 but who knows what lies in the future. What are your thoughts. TC: ~300k#investments #robinhood #stock #investments #fidelity #etrade #schwab
I bought in at 8, literally free money, easily going to 40 in a couple years
Completely agree with you. I missed at 10 but added around 12. Will keep adding more at this level.
I am passionate about the fintech space and I am slowly but steadily adding into my core HOOD position. I am seeing an asymmetric risk/reward opportunity. My thesis: 1) I am seeing lot of value in Robinhood Gold. You get 3% Match in IRA which kinda pay for itself. If they keep adding gold members, it’s a solid ARR for the company. 2) Expansion to UK and other developing markets. Robinhood has the brand name and it can easily acquire new customers. 3) Launching a new credit card for gold members. 4) Strong balance sheet with 5B net positive assets. No bankruptcy concerns. 5) Bitcoin momentum. If they keep improving the product, they could gain market share from Coinbase/Kraken etc., 6) Cheap valuation: E/revenue of 3.5 and getting into GAAP profitability. It’s a slow grind back to 50 but it will get there. You need PAYtience.
Risk is that legacy players can copy their features like 3% match/crypto etc (recently Fidelity added crypto trading). That will slow down their growth potential.
Well, the guy/gal works at fidelity, can you comment on if fidelity will be able to replicate RH’s approach?
Hood is already valued at 12bn and charging people $5 a month to give them 180 dollars in value doesn’t seem to me that tempting. I know you are taking about boomers vs young people but think of when the young people inherit millions of dollars from their parent. They prob want a financial planner with a book of business to talk to probably the same person who managed their parents money so going to Schwab, fidelity and Morgan Stanley.
What's the moat? That's the different thing they are doing so it can't be copied
I think their UI is very impressive and the gold features such as instant deposits, 24 hour trading, their experience on crypto trading I have not seen on any other platforms (fidelity/etrade). I see Robinhood setting the standards for the industry for the next decade at least and it will be hard for the grandpas at #fidelity and #etrade to catch up. As a RH user, its hard for me to deal with issues at other platforms (wait a couple of days for the trades to settle to withdraw funds, can’t sell stocks at my leisure, hard to do margin investing). One gripe I do have about RH is not being able to buy HK stocks, would love to do that. Also, interested in seeing how the launch in UK helps monetarily given that they ban PFOF in UK.
Can you elaborate on the HK part OP? You mean the Hongkong exchange?