What is the bull case for HOOD?

Jan 31 33 Comments

I avoid investing in meme stocks. HOOD has been one since it’s IPO.
After its historic dip, I have been thinking is it a good long term investment? Based on my understanding, answer is still ‘no’ for the following reasons:

1. Payment for order flow is not a hugely profitable business model. Moreover, it may be banned in future by regulators.
2. Robinhood has gamified the investment so that users can trade more frequently. More trades, more order flow! However, regulators don’t like that. They may ask Robinhood to not gamify it.
3. Robinhood doesn’t manage assets like Charles Schwab or Fidelity. So, there is no ‘other’ source of income
4. Robinhood is trying to get onto crypto but there are already well established players.

Any comment to prove me wrong is greatly appreciated.

#Investment #robinhood

TC:230k + paper money

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TOP 33 Comments
  • Meta
    capuccino6

    Go to company page Meta

    capuccino6
    What you are missing is that hood have fucked badly in GME. The ones that were impacted are their main customers and the one that are shorting the stocks are their customer base. Amazon is fu**k up but they at least understood to never mess up with customers
    Jan 31 3
    • Meta
      capuccino6

      Go to company page Meta

      capuccino6
      Most RH falls under the category of gamblers rather than investors (see wsb). They were in robinhood because they felt it was fun/good learning experience with better chance to win than a casino. When the GME fiasco occurred, wsb gave a bad advertising to RH (thats why only RH got sued).
      If robinhood want to succeed they need to regain trust from their main customers. So first thing is to have the Bulgarian boy step down and then run a campain to regain trust
      Jan 31
    • OP
      GME fiasco significantly dented their ability to attract more investors. Especially, serious ones.
      Jan 31
  • Amazon
    YouArePoor

    Go to company page Amazon

    YouArePoor
    I think RH is a good company that attracts good talent.

    They are more innovative than the other brokerages. And as RH continues acquiring more assets, the other brokerages will lose their upper hand.

    RH = zoomers. Other brokerages = boomers
    Jan 31 1
  • FanDuel
    plvwhau

    Go to company page FanDuel

    plvwhau
    Whats sad is robinhood still has the best UI out of all trading apps. Any other company thats not disabling people from selling gme or buying witb good UI could eat up
    Jan 31 3
  • robinhood should disable the sell button on their app to avoid HOOD going further down 😂😂😂😂😂
    Jan 31 1
  • Infosys
    emeraldk

    Go to company page Infosys

    emeraldk
    You may want to think of the investment separately from the company itself. If you look at the company - the results were terrible, user growth stalled and the GME fiasco happened and so on.

    The investment on the other hand becomes more and more compelling as the stock price goes down especially - the key is to know what the right price for such a company. They have plenty of cash - about 6 dollars a share, their product roadmap is great, the user spend is very low and can only increase, the losses are not very high if you think operationally - most of it is compensation. So the question is what is the right price ?

    I think it is worth at-least 30 - I am considering that every user is worth 1000 dollar in lifetime value - currently they generate around 64 dollars per user per year but I think that will go higher and I think they can generate atleast 1000 dollar per user over 5 years. If you multiply 20 m users by 1000 - that will come to around 20B. Add 6B cash + exciting products in roadmap - it can go towards 25-30B value which is in the range of 30 dollars per share

    If every user is worth say only 200 - still the value is around 10 per share if you add cash and some product roadmap premium. So risk reward seems to be great in this investment
    Jan 31 4