Also, fun fact from their S-1 - 34% of their crypto trading revenue came from Dogecoin in the first quarter. And 17% of total revenue came from crypto.
That poor kid never should’ve seen that balance, and I just can’t imagine how they would let that happen. I mean a kid in that position certainly couldn’t get a loan for over 700k.
As I say upthread, Robinhood’s entire business model is about luring young people into inappropriate, highly risky positions with gamification and “free”, and disguising the fact that they’re trading on margin. They’re scummy as hell, even if you don’t buy into the order flow/trading suspension conspiracy mongering.
I don’t think I know enough to even know what the conspiracy suggestions are, but what is happening there is wrong. I mean we, as a country, struggled for years to reduce predatory lending to the point where it’s nothing like it used to be. This seems like they came up with a way to get around that AND stack a crappy information system on top of it that misleads their customers as to what is actually going on with the accounts.
70 million doesn’t seem to be enough.
So, uh, what does he do?
Robinhood also disclosed that the SEC is also looking into possible insider trading ahead of the announcement of the Gamestop/AMC trading suspension.
Edit: Oh yeah, Robinhood also priced its IPO yesterday. It came at the bottom of the indicated range, so not great, but on the other hand it’s still triple the valuation of its private equity raise last year. More sticking it to the hedge funds! Also, in other democratising finance news, the founders will still have at least 65% of voting rights with a less than 20% economic stake.
Since you wrote this, Robinhood is up 100%. I also recall reading a couple of heavily upvoted Reddit threads sharing similar thoughts. At the same time, Ark Invest was buying 90k shares so they doubled their money as of today. Point being, the “democratisation” of the stock market. the rise of the “retail investors” are actually pages from an old story: shifting profits from the hands of minor investors to the bellies of the large hedge funds. But hey, at least we got the memes!
GME and AMC already ran up 1000% . And HOOD is down 10% premarket today. Someone is always left holding the bag. In january some hedge funds even got left holding it. This retail investor thing is absolutely changing the market just look at all the new rules the SEC and DTCC have passed in the last 6 months, most of which have been in favor of the little guy. This movement is shedding light on shady/illegal practices that have been ignored for to long and forcing change.
Payment for order flow
All of these were “myths” and not discussed in media up until about 3 months ago. It took a CNBC reporter to accidently say naked shorts on air before they would even mention it.
Just go google retail investor power and see the dozen plus articles talking about it from last summer until now.
How could these be myths? There’s been dark pools since the 80’s. There’s been loads of articles about them. Flash Boys was a best seller about them just as one example.
Broker execution delays and payment for order flow are also super well known. Here’s an SEC explanation for retail investors from 2013:
I think that it’s good for people to understand these things so that more people are interested in them is good. But this whole ludicrous claim that any of this stuff was unknown or hidden just because a lot of people were ignorant is comical. It’s all well known, well documented, well covered.
Just because reddit people just decided to read a basic summary of how financial markets work doesn’t mean that they conjured the knowledge from the depths.
I mean, there’s a freaking wiki article about it:
It’s like financial markets 101.
I was insinuating these were myths in the “media”. I thought that was pretty clear? I mean I pretty much said that?
" This movement is shedding light on shady/illegal practices that have been ignored for to long and forcing change."
“All of these were “myths” and not discussed in media up until about 3 months ago. It took a CNBC reporter to accidently say naked shorts on air before they would even mention it.”
Myths is even in quotations and you still take it literally?
Now everyone is talking about it, even Gensler is talking about in interviews on CNBC. Enough people know about it now and are being loud enough for it to be all over financial media and to enact change in policies. That doesn’t happen without these Reddit “detectives” ;). They have absolutely made it more mainstream to discuss it and it’s absolutely helping drive change. What ever the previously plenty of coverage you are referring to did not.
Funny enough there is update in the Wiki about the Naked Shorts comment on CNBC in your link.
IMO Wallstreet pissed off the internet. The internet usually wins these fights but this is a big one. It’s very interesting and entertaining if nothing else, i’m even making a little money.
Something is changing and no one can tell?
I don’t follow US regulation as closely, but in Europe, dark pools were addressed by MiFID II, which was proposed by the Commission in 2011 and came into force in 2018. Naked shorting has been illegal on both sides of the Atlantic since the global financial crisis. But, sure, there are going to be regulatory changes because of the meme stocks situation. For the most part, I’m not sure they’re going to be changes the WSB crowd would cheer, though.
I just passed a TV and how the flying fuck is Gamestop worth $195/share still?
Because the market is fully efficient and filled with fully informed rational agents acting in mysterious ways.
Well so far there have already been quite a few changes from the SEC and DTCC the last 6 months and they have all been very well recieved. Almost universally pro retail investor and anti market shenanigans.
Enforcement of said rules is a different matter and the jury is still out on that.
It’s more fun and profitable if the market is based only on what you think other people are going to do than annoying and slow things like company performance.
The market has always been valued by what other people do, the difference is previously their actions had some veneer of rationality.
Dont confuse people buying in for a short squeeze to investors buying in based on fundamentals. This has just turned into a long squeeze instead of a short one. Still plenty of shorting going on still plenty of people holding out until they maybe cover. Also still people wanting to stick it to the man or somesuch thing. Funny enough the longer it takes the more fundamentally sound the company gets. Earnings report is today, should be interesting. Either way, Meme stocks are easy money.
Well, yes, but it also had some connection to real things being done. At least some ended up with nice flowers and some learned to grow them, and everyone had skin in the game they were playing. Now it’s significantly more like gambling where some people can tilt the table and others wink the croupier, with the house skimming in more and more elaborate ways.
Of course, the above is mostly about the excesses, the vast majority is… Some other topic. The common idiot can certainly make a fair bit of change by following some of the long bets.
The common idiot can make a ton of money in a ponzi scheme too, that is, until the party suddenly stops.