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OK, 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 r
by yding 7y ago
OK, 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 agoIt is safe to say that VCs wouldn't be investing huge sums if they didn't see a remote chance of a huge takeoff; they are VCs, not value investors.
- thekyle 7y agoYeah, and of those accounts that are funded I'd guess that many don't have more than $100. Personally I know my Robinhood account only has a couple of bucks in it and I just haven't bothered to close it. I use TD Ameritrade and M1 Finance for the bulk of my actual shares.
- doingmyting 7y agoI'm not sure how representative of a customer base it is but I've seen some serious money in screenshots on subreddits like r/Robinhood and wallstreetbets, sometimes in the millions. There are many day traders that now use Robinhood for better or worse. I wouldn't count out their userbase just based on your own experience
- ackbar03 7y agoJust curious, why don't you though? I thought Robinhood would be more economical
- ac29 7y agoIf you're buying non-trivial amounts of stock and holding it, paying a couple dollars a trade isn't a relevant concern.
- mehrdadn 7y ago> If you're buying non-trivial amounts of stock and holding it, paying a couple dollars a trade isn't a relevant concern. What becomes more relevant in that case? Also I thought the fees are more like $7 rather than $2... have they decreased?
- astura 7y agoYes, commission has decreased, there has been a fee war going on lately and as a result fees have been going down substantially across the board for the major players. Fidelity doesn't even charge for wire transfers anymore. https://www.reuters.com/article/us-funds-fidelity-commissions/brokerages-race-to-zero-fees-points-to-a-bigger-war-to-come-idUSKBN1670DV https://www.reuters.com/article/us-funds-fidelity-commission... https://www.cnbc.com/2019/02/12/fidelity-and-schwab-fire-latest-salvos-in-brokerage-fee-war-doubling-etfs-available-for-free-trades.html https://www.cnbc.com/2019/02/12/fidelity-and-schwab-fire-lat...
- teej 7y agoNo, I wouldn’t. Because I’d guess that etrade’s average account size is likely 25-50x that of Robinhood. I don’t think encouraging young adults to gamble beer money on the stock market is a long term viable business model.
- ctvo 7y agoOof. 50% funded? I’d go for 5% and feel I’m closer to the mark.
- docker_up 7y ago50% is not super conservative. My guess is 10% is closer to the actual number than 50%.
- tellak 7y ago50% is “super conservative”?? By what reasoning? How is that more appropriate than 5% or .5% or .05%? Either you have a justification for that estimate or you’re just making something up, which doesn’t mean squat.
- dtwest 7y agoYou are missing the point. The number of accounts is not an important metric. I am not saying your conclusion is false, just that you do not provide relevant facts to support your claim. Assets under management is much more important, and not necessarily strongly correlated with number of accounts.
- dmitrygr 7y agoetrade does serious business too. Some actual companies, like Apple, use them to give employees stock.