Many people have been saying things like "This is great for SoFi, here's your chance." And while some people are switching to SoFi, more people are switching to the establishment brokerages like Fidelity. Fidelity does not want SoFi, Robinhood, M1, Square, Chime, Webull, etc to exist. If challenger banks and fintech startups want to be taken seriously, shit like this Robinhood debacle can't happen. I'm hoping Robinhood can get their shit together and stop hurting the long-term prospects of fintech startups trying to take on the dinosaur establishment. #finance #tech #fintech #gme
😂 your logic is flawed and you are overthinking. It’s like saying RH is the necessity evil so it should be treated lightly. Nope, shit like this is a good lesson for all the current and future fin-techs to learn.
You might misunderstand what has happened. Shit like this can’t be avoided if establishment creates the rules. The trading restrictions will happen in any brokerage app because of the massive liability issue. Fin tech is a highly highly regulated industry.
It obviously won't destroy fintechs, but it is a huge setback. 2021 was set to be a huge year for fintech IPOs, user growth, and legitimacy in the marketplace. This is a pretty big speed bump. I think there is also space for both Robinhood and SoFi to succeed, in fact, Robinhood checking accounts are powered by SoFi/Galileo, so they are our customer.
well they are stupid for not preparing for such events, esp as a brokerage. means management is incapable of running a proper brokerage business. saying “well we had no choice” “there are requirements” (that they did not prepare or have a plan for) on national tv shows what an amateur the ceo is
I agree 💯 . They should have tried to get a loan for a few billion, and if it wasn't possible be transparent to customers from the beginning. It's like he was too embarrassed (which he should be) that they had liquidity issues and didn't want to tell customers the truth. Many people are realizing this same thing probably happened in March or last year as well, and it wasn't a server issue when they were down. I feel like his time as CEO is limited now.
honestly don’t think this would hurt other fintech firms in a material way
Tbh most fintech are simply nice UI's on top of shitty cores (existing banks)
This is how many get their start, but Robinhood for example built their own clearing house, and SoFi applied for a bank charter. The industry is maturing away from relying on establishment partners.
When is SoFI getting listed ? Considering buying its stock, what's the current valuation at ?
It will be merging with Chamaths SPAC symbol IPOE which is already trading and up 150% so you might want to see if it will go down a little. The merger will complete and the ticker will switch to SOFI around the end of Q1.
I used to think that the old ticker lives alongside the new ticket. You're saying that the old ticker just switches to SoFI and so if someone wants to invest in SoFI, they need to buy IPOE and the ticket would just automatically change to SoFI when the merger completes ?
OP, I think you're making a very broad leap of faith in assuming people bucket fintech upstarts together. It's just not the case. I mean, come on, the whole point of founding or working or trying to get people to /use/ an upstart is because you have an individual, unique identity which is differentiated not just from incumbents but /other/ upstarts. If you need to start working about optics that pertain to FinTech startups as a whole, it's a tacit admission that you don't have a strong enough brand to stand on its own. So a) I wouldn't worry about it and b) Robinhood's screwup just leaves space for another upstart. Remember, the only reason Robinhood could even get users in the first place was because incumbents were mis-executing so bad. It's not like any of those gaps in experience have gone away. Source: I was an early employee at a FinTech unicorn (reaching decacorn status pretty soon) pre Amazon and I'm not even remotely worried about Robinhood causing blowback.
My perspective is that of SoFi's daughter company Galileo, were we are trying to be the "aws of fintech." (Yes it's a cheesy comparison.) Robinhood is actually one of our customers for their checking accounts. If high wealth individuals can't take challenger banks seriously, millennials will switch to establishment banks once they generate real wealth. There is a still a big trust gap that needs to be filled with challenger banks as an industry vs the establishment.
I do see what you are saying though, the industry has plenty of momentum and won't be stopped at this point, but this is a setback.
We do understand what Robinhood had to do, but the problem is how they communicated, after the fact.
This whole GME situation just showed the world how vulnerable platforms are to the power of users collectively bargaining/boycotting. It should worry all consumer tech platforms - whether that's FB or some fintech app.
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Well said. Trading restrictions will happen in any disrupter brokerage if they had the load rh had from this crazy wsb army. Establishment brokerages are laughing in their dreams. They have banks behind their back that print money.
I'm sure their lobbyist are already thinking up strategies to gate keep and make things difficult for startups. Whatever the SEC changes it won't end up benefiting smaller companies.
Financial system can’t be disrupted if disrupters are melting down one by one. Establishment is the only winner in this boycott.