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Robinhood has more customers than ETrade https://www.investors.com/news/robinhood-app-has-more-customers-than-online-broker-etrade/ https://www.investors.com/ne
by yding 7y ago
Robinhood has more customers than ETrade https://www.investors.com/news/robinhood-app-has-more-customers-than-online-broker-etrade/ https://www.investors.com/news/robinhood-app-has-more-custom... and I bet it's growing much faster too, so no a 7 billion dollar market cap is not insane when ETrade has a market cap of 11 billion.
The problem with Robinhood, like many startups, is an issue of profitability and monetization. They've been switching up Robinhood Gold to try to get more customers to sign up. I'm sure that's where a lot of their effort is being put as they approach "have to IPO" valuations.
This low dollar amount round is also an indication that while they are still burning money, they may not be burning as much as they may have in the past. If I were to guess, turning on self clearing was a big part of that.
- docker_up 7y agoRead that more carefully. 4 Million accounts, not all are funded. How much are funded? We don't know because they didn't say. I have an unfunded Robinhood account for the stock quotes. E-trade is a public company so all its numbers are GAAP. Their account numbers are funded. So it's not an apples to apples comparison. Plus they are profitable, so the valuation numbers make Robinhood look even worse.
- prklmn 7y agoGAAP is so overrated. It's 2019. The goal is to acquire users, not to make money. Unprofitability is sexy. In all seriousness this might as well be 1998 and I just hope they go public before the next big market swing down so I can short it.
- dtwest 7y agoFrom your source: "However, a Robinhood spokesperson said not all 4 million accounts are funded. The brokerage did not disclose total assets under management, average account size or typical starting balance." They did not disclose the metrics that are important. You would need AUM information to effectively support your statement.
- yding 7y agoOK, let's just be super conservative and say only 50% of Robinhood's accounts are funded. So they are valued at 3,500 per funded account. Let's assume you're right and that ETrade's accounts are all funded. So they would be valued at 3,081 per funded account. Would you pay 13.5% more per account for a company that's growing at least 5x, if not 10x as fast? I know I would in a heartbeat, all else being equal. Now, not all else is equal, so you can make an argument either way, but I wouldn't call Robinhood's valuation "insane."
- BinaryIdiot 7y ago> OK, let's just be super conservative and say only 50% of Robinhood's accounts are funded I mean, we're all just guessing here but 50% seems _super generous_ to me. It's really easy to sign up for a Robinhood account. I'd love to know what the real numbers are :)
- Consultant32452 7y agoI have a Robinhood account. They gave me a free share of some stock to create an account. I just have that one share. I don't even have the app installed on my phone.
- ignoramous 7y agoIs it not safe to assume that VCs wouldn't be investing huge sums of money it they weren't convinced of the metrics?
- dharmon 7y agoUsername checks out...
- perfmode 7y agoi would not say it is a safe, honestly.
- dragonwriter 7y ago
- novok 7y agoThey could make a fixed fee robo-advisor service for example, and start competing with businesses like wealthfront.
- ackbar03 7y agoPersonally I think this whole robo adviser thing is just bs. It's a marketing gimmick at best, not much real value
- novok 7y agoAutomatic rebalancing of a custom portfolio is a value. I wouldn’t bother otherwise myself. Tax loss harvesting gives you a tax deduction also.
- astura 7y agoThis is what Acorns is
- anonu 7y agoAt E-Trade you can actually make money off the customer. Customers pay for a service. At Robinhood they get paid by the liquidity providers. And margins continue to shrink there