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Robinhood cuts losses after transaction revenue drops
- adoxyz 4y agoStock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.
- anon23anon 4y agohow times have changed
- toomuchtodo 4y agoThe Fed giveth, the Fed taketh away.
- funstuff007 4y agowell, not too much. The balance sheet is still within 97.5% of its all time high. I would like to see a good model of Fed Funds X and Balance Sheet Y = Z amount of stimulus. https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- deleted 4y ago[deleted]
- micah94 4y agoYeah, I'll believe the "tightening" when I see it. Balance sheet still astronomically high. Banks are not being forced to hold dollars. Current Govt Admin spending like drunken sailors. The only difference is we have higher interest rates which is straining regular people. It's a race to see if inflation actually comes down or economy goes to shit. Or both together all at once?
- newaccount2021 4y ago
- funstuff007 4y agoWell, they kept it running long enough for the VC's to get their cash out.
- iepathos 4y agoIronically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.
- deleted 4y ago[deleted]
- zapt02 4y agoThe problem is that many people has less money to go around due to cost of goods and interest rates rising, so it's harder than ever to take advantage of lower stock market prices.
- notch656a 4y agoTime that market.
- Retric 4y agoYou can cost dollar average without timing anything. Essentially you discover after the fact what was the best time to invest. Which is surprisingly hard to pull off long term as most people are forced to take money out when they run into financial issues which then correlates with down markets.
- conorcleary 4y agoAverage down and buy the dip are real.
- 2OEH8eoCRo0 4y agoSomeone I know kept averaging down and put in everything that he had as the dotcom bubble was bursting.
- yrgulation 4y ago“In 2022, there were around 1.63 million software developers and software quality assurance (QA) workers employed in the United States.”. I doubt its the tech layoffs that did it. Maybe the cost of leaving exploding led to less disposable income meaning less people willing to gamble. Also why risk your money when everything seems to be going under?
- xeromal 4y agoCash is also shrinking. Loads of new investors existed thanks to the government stimulus payments. My memory is failing me but I read that after the first few stimulus checks, savings went up 33% for the average american household. (I honestly don't know what the 33% was about but it was a positive change). That's pretty much all wiped out as people lost money. I think that glut of investment was just a temporary thing
- ramesh31 4y agoNFTs suddenly now the Beanie Babies they always were.
- spaceman_2020 4y agoIt's also the volatility. Wild swings within days and weeks. And general uncertainty about the direction of the market. The toughest trading environment for retail traders.
- deleted 4y ago[deleted]
- reducesuffering 4y ago> Rising interest rates helped lift quarterly net interest revenue to $128 million, more than doubling from the same period a year ago. Chief Financial Officer Jason Warnick said the company has about $17 billion in assets that generate interest revenue. While Robinhood used to pay a competitive interest rate for cash in the account, it is now 1.5% while Fed risk-free rate is now 3.75%+. You need to pay for Gold subscription to access the decent interest rate. Square/Block/Cash App also just announced a huge boost in profitability. While it wasn't feasible in the last years of zero interest, now, digital wallets are profiting off the difference of giving you 0 - 1.5% interest of your sitting cash while they pocket 3.75%+.
- pcurve 4y agoIt wasn't long ago when I felt 1.2% was a good CD rate. Now I'm canceling all of them to move to online savings account paying 2-2.5x that amount.
- throwaway12245 4y agohttps://www.schwab.com/cd-rates-test https://www.schwab.com/cd-rates-test 1-3 month CDs are 3.9%
- artificialLimbs 4y agoYep. My local credit union is offering 4.5% on an 18 month > $1,000 CD.
- throwaway12245 4y agoU.S. Inflation is 8.2%, though. :(
- acchow 4y agoThat's backwards looking tho. We don't know if inflation between Nov 2022 to Nov 2023 will be 8.2%.
- kylehotchkiss 4y agoIf Robinhood had to close shop, who's a good broker to transfer holdings over to?
- loeg 4y agoFidelity or Vanguard.
- whitepoplar 4y agoFidelity or Schwab
- system2 4y agoFidelity. Very nice desktop and mobile apps. Trustworthy and established. Robinhood cant even be compared to it. While you are at it, get yourself some FNILX stocks and collect dividends on an index.
- alphabetting 4y agoFidelity mobile sucks though. Robinhood is makes gambling savings fun!
- stouset 4y agoI see this as a feature.
- tennisflyi 4y agoPretty sure they have Robinhood-esque mobile update coming. Edit: It's already here.
- missedthecue 4y agoThe thing about Robinhood seems to be fee-free options trading. I don't think any other broker does this
- SamReidHughes 4y ago
- MattyMc 4y agoI suspect that Robinhood's active user count will be highly correlated with market/crypto returns.
- LeafItAlone 4y agoInteresting thought. Is Robinhood that common in the crypto world? I know they support it, but I would have guessed it was an “also” feature rather than a driver.
- dcolkitt 4y agoCrypto was responsible for approximately 35% of Robinhood's revenue in 2021.
- loeg 4y agoThe fee structure differs among their offerings, so that doesn't tell you relative popularity.
- metaphor 4y agoNope. From FY21 10-K filing[1] p. 74, cryptocurrencies represented 23% of total net revenues, or 29.9% of total transaction-based revenues. [1] https://www.sec.gov/Archives/edgar/data/1783879/000178387922000044/hood-20211231.htm https://www.sec.gov/Archives/edgar/data/1783879/000178387922...
- tnel77 4y agoNow that Robinhood will let you send your crypto to a hardware wallet, it’s not a bad method for DCAing into a coin of your choice.
- eddywebs 4y agoI believe the reason for the correlation with crypto market and Robinhoods active user count be the demographics of people who invest heavily in crypto;Gen X, millennials and zoomers. Thoughts ?
- irjustin 4y agoWhat is this in the context of the wider market vs other Retail brokers? I don't think this is a knock against RH more a description of what's happening in main-street.
- throwup 4y agoI certainly think it tells us something about RH. You don't see Vanguard or Fidelity losing a third of their userbase in a year.
- potatolicious 4y agoExactly this. RH has a business model closer to casinos than it does to Schwab or Fidelity. The headline feature for RH is "fee-free trading" which is fine, but once you read past the headline you'll come upon a vast amount of gamification, calls to action, and every other tool borrowed from gacha games and gambling generally. In that vein I would expect their corporate performance to track more closely with gambling and F2P gaming peers than they would track more established stock trading apps. More cynically RH's product was making people feel like geniuses in a bull market. The bull market is now gone.
- melenaboija 4y agoI think it tells that RH did what they intended to do, pull into stock market non traditional investors making it look as an easy way to make money. The strategy worked for the recent years but these investors probably will be the first ones to jump off the boat when things start looking bad.
- irjustin 4y ago> You don't see Vanguard or Fidelity losing a third of their userbase in a year. I can't read the article, but you define "monthly active users" as a user exiting the platform i.e. pulling their money out?! Originally, I had assumed it was "users who don't open the app/website" but expectation difference caused me to look it up: > Robinhood defines a monthly active user as a "unique user who makes a debit card transaction, or who transitions between two different screens on a mobile device or loads a page in a web browser while logged into their account, at any point during the relevant month. A user need not satisfy these conditions on a recurring monthly basis or have a Funded Account to be included in MAU." [0] I have a Vanguard, I haven't opened it in a month. By the above MAU definition, Vanguard lost me too. Again, this _alone_ doesn't tell us that RH is doing poorly vs other Retail Brokers. They could be, but not enough info. My take is - most people don't want to see their ultra red portfolio and are just not opening the app. [0] https://www.fool.com/investing/2022/05/09/robinhood-losing-monthly-active-users-worried/ https://www.fool.com/investing/2022/05/09/robinhood-losing-m...
- skymast 4y agoWhy would anyone trust a financial institution with their money when they have acted like Robinhood as acted? This is a fundamental question.
- njovin 4y agoI closed my account with them during the GameStop debacle and never looked back. I wasn't trading GME but was appalled at their reaction.
- shahmeern 4y agowhat exactly were you appalled at?
- mey 4y agoNot parent, but I assume it's something in relation to https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-dollars-after-causing-users-significant-harm.html https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-...
- gpt5 4y agoThis fine has nothing to do with the GameStop debacle.
- junon 4y agoThey effectively told their users "you're being children, we know better than you".
- deleted 4y ago[deleted]
- wcoenen 4y agoI don't think Robinhood had any choice there. Trades don't settle instantly. Robinhood needs to post collateral with the Depository Trust & Clearing Corporation while settlement is pending, and the required collateral goes up with volatility. During the "GameStop debacle" they had to raise billions of USD in additional capital for this purpose, so no wonder they had to hit the brakes.
- TheLoafOfBread 4y agoStock does not go up, people does not care.
- stevespang 4y ago
- jesuspiece 4y agoGee I wonder why
- bob1029 4y agoI've been back and forth over robinhood vs fidelity vs IBKR for a few years now. I do not do any heavy day trading, but I do like to buy a few shares of things throughout the day, every day. As a consequence, the user experience in mobile form factor is a big aspect for me. I understand for any professional in the space, this is perceived as lunacy. I am no professional. Once IRA support is added, I'll be locked in for life. I don't understand how someone can use the fidelity or IBKR mobile apps and think "yes this is all ok" after spending 5 minutes in the RH app.
- webinvest 4y agohttps://archive.ph/5URwT https://archive.ph/5URwT