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Drudge Retort: The Other Side of the News
Thursday, July 29, 2021

Shares of Robinhood started trading on the Nasdaq at $38 per share on Thursday as the popular stock trading app made its debut. Trading for the first time under ticker HOOD, the online brokerage hit the public markets it seeks to democratize for amateur investors.

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No wonder Kushner quit politics and went into the investment business.

www.reuters.com ~ KUSHNER QUITS POLITICS ~ OPENS INVESTMENT FIRM

#1 | Posted by Twinpac at 2021-07-29 01:13 PM | Reply | Newsworthy 1

As of this writing (1315 EDT) HOOD is down $2 or 5.26%.

This company's business model involves preying upon unsophisticated people who cannot reasonably be defined as 'investors', filling them with a blizzard of confusing nonsense loosely described as 'advice' and 'analysis', and providing lousy, expensive execution of customer trades. SEC action could easily poke a big hole in the company's operation and cause HOOD to have to close up shop. Insiders and others at HOOD do not have the typical lock-up period faced by similar folks at companies going public, and those insiders certainly recognize that they had better get while the getting is good. A look tomorrow and this weekend about insiders trading out of their positions will tell the market all it needs to know.

Stay away from HOOD...

#2 | Posted by catdog at 2021-07-29 01:27 PM | Reply

@#2 ... SEC action could easily poke a big hole in the company's operation ...

Didn't Robinhood already have some, ummmm, discussions with the SEC regarding their payment for order flow stuff?

#3 | Posted by LampLighter at 2021-07-29 01:32 PM | Reply

Robinhood?

Take from the rich and give to the poor. The name right off the bat is a "hook" to fool amateurs.

"Caveat Emptor"

CATDOG is right. Buyer Beware.

#4 | Posted by Twinpac at 2021-07-29 01:41 PM | Reply

I had forgotten money sitting in a trading account and bought 47 shares 10 minutes in at $37.79.

It immediately tanked. It appears to be inching back up but every time CNBC talks about it, the price drops.

#5 | Posted by rcade at 2021-07-29 01:54 PM | Reply

They allocated a large portion of the IPO shares to retail investors who may not hold on to the shares as long as institutional investors might for IPO shares.

Also, the IPO allows insiders to sell some of their shares (15%) immediately instead of waiting for a period before the insiders could sell.

Of the two above, my guess would be the first (retail investors) may be a good part of the selling.

Now the wait is on to see if the retail investor meme buying will kick in....


#6 | Posted by LampLighter at 2021-07-29 02:03 PM | Reply

Financials and banks is a low-margin, low-moat business, IIRC.

Even if viewed as a tech product geared for the every person, not for me.

I'm already overweight in tech for cloud and chip companies.

#7 | Posted by GOnoles92 at 2021-07-29 03:15 PM | Reply

Do you own any NOW? I wish I'd bought it at $83 a share when I began work as a full-time ServiceNow developer. It's $590 today.

#8 | Posted by rcade at 2021-07-29 03:18 PM | Reply

#2

Not sure where your analysis comes from $HOOD isn't a great investment in my opinion but for small retail trades it is a pretty good platform. The "advice" is pretty worthless but if you need advice you shouldn't be trying to trade without a broker anyway.

As for me up 40% in the past year using Robinhood so I'm not complaining. If I had enough to get a real brokerage I would, but I don't have enough to invest for them to take me without a ton of fees. Most of the other free ones don't have the flexibility and options for us small fry so I'll keep using it.

#9 | Posted by TaoWarrior at 2021-07-29 03:28 PM | Reply

Tao:
HOOD down 7.3% as of 1603 EDT.

The company is one step from high frequency and day trading and their customer base is people who shouldn't be investing that way. Someone who opens an account and has enough to purchase only fractional shares probably doesn't have the money to risk in the equities market. From what I've read, the site also allows VERY inexperienced investors to trade derivative contracts in a manner which is risk-seeking and not aimed at reducing risk. Your success notwithstanding, those who want to get into sound investment activity should save their pennies until they have enough to open an account at a major mutual fund complex, where they can obtain diversification, liquidity and very low transaction cost, so as to mimic performance of major equity or fixed income indices with minimal tracking error...

#10 | Posted by catdog at 2021-07-29 04:03 PM | Reply

Robinhood's strength is 18 million accounts and an average account holder age of 31. They own the young investor.

Even if their business runs into trouble how much is it worth to a larger brokerage to acquire a massive userbase of tomorrow's old investors?

#11 | Posted by rcade at 2021-07-29 04:28 PM | Reply

I've used Robinhood for years now.

I also have a fidelity account among others.

Robinhood is great as long as you know there are risks involved.

#12 | Posted by LostAngeles at 2021-07-29 04:41 PM | Reply

@#11 ... Robinhood's strength is 18 million accounts and an average account holder age of 31. They own the young investor. ...

A stated goal of the CEO is to turn those novice retail traders into more long-term-oriented investors.

At this point, it is easy for him to say that, but more difficult to do. However, now that it is a public company, each quarter the results of his goals can, and will, be evaluated.

#13 | Posted by LampLighter at 2021-07-29 04:44 PM | Reply

#9 | Posted by TaoWarrior

There's no minimum deposit to open a trading account at TDAmeritrade.com, only for margin accounts. My wife and I both have a couple of accounts there (opened as ScottTrade before they were sold to TDAmeritrade). Easy to navigate website.

$0 commissions on stock trades.

You can also get a debit card linked to the account for which they'll refund ATM fees if you have to get cash somewhere. I haven't yet, but it's nice to know I'll get the ATM fees back if I ever had to.

www.brokerage-review.com

#14 | Posted by AMERICANUNITY at 2021-07-29 06:04 PM | Reply

#10

You aren't wrong, however since I'm pretty strongly libertarian if people want to risk their money that is their business. Robinhood has pretty large disclaimers when you start, and when you do any new type of trade eg. options, that you can lose money doing this and only do it if you know what you are doing. The fact that you can just click the warnings away and be a smooth brain ape is kind of a plus in my book. Too many services want to nanny you and charge you a fee to be your nanny, for some people that is good, but some people want to cut the apron strings. If you don't know that the stock market has risks and using options or leverage increases the risk you shouldn't be investing but that is neither mine, nor an apps place to determine. I frequently do limit orders set to extended hours there is a big ole' warning when I do that about the increased risk of volitility doing that. However I figure if I decide I'll pay X for a stock and it nose dives after hours and the order triggers but it keeps dropping well I felt the stock was worth X I'll either hold until it comes back or I'll panic, sell, lose money. My choice, I determine my own risk tolerance.

#14

There are a couple out there besides Robinhood but at this point my account isn't large enough to make transferring really worth it and too large to take the tax hit selling and moving. I have heard some will pay transfer fees for you and maybe some day when I have some time I'll look into it but honestly I don't get what the hate is about Robinhood it pretty much does exactly what is advertised and is very easy to use.

This winter when I start bringing in extra money again I'll probably look at just opening a second account with another service and TDAmeritrade is already on the short list along with WeBull and Fidelity. Maybe I'll open a couple with a bit in each to play around then after a year or two migrate to whichever I find suits me best.

#15 | Posted by TaoWarrior at 2021-07-29 07:06 PM | Reply

0948 EDT, Friday:
$34.15, down 10% in less than 24 hours.

#16 | Posted by catdog at 2021-07-30 09:49 AM | Reply

#16

Back over 36 but starting to go back down.

#17 | Posted by TaoWarrior at 2021-07-30 12:54 PM | Reply

For the uninitiated.

During the Gamestop stock/Reddit controversy...Robinhood prevented average joes from buying or selling GME stock during a critical point in time. It appeared to be price manipulation. As a result, it kinda looked like Robinhood was conspiring with the 1% to ---- over the average joe investors. So a lot of the average investors started jacking with Robinhood.

So who do you believe??

#18 | Posted by jamesgelliott at 2021-07-30 10:36 PM | Reply

#18

You could still sell but not buy. Not only that but post game analysis shows the Jan surge was actually not as driven by retail as the narrative claimed. There was a lot of institutional action going on that got drowned out in the retail noise. So the effects of Robinhoods actions probably in hindsight did less than reported to kill the momentum.

I am not justifying their actions and I have no way of knowing if the reported reason for cutting off buys was real or just a cover to help Hedges.

#19 | Posted by TaoWarrior at 2021-07-31 02:49 PM | Reply

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