How long do you honestly give Robinhood before they go out of business?
why are they not charging a nominal fee (25c?) just to post any sort of profit?
what happens to my stock when they go broke?
Don't they invest your unsettled funds?
>>1179769
they probably are already in debt to investors.
The more people they have using the app the more money they will make due to them getting interest on the cash people have in their accounts.
>>1179769
theres no way overnight rate is paying the bills. they are going to have tonat least charge something or start advertising I would imagine. Im not sure if that's even legal
>>1179773
How much cash are people going to leave in their accounts for a period longer than a day or two. Wouldn't their customers be people specifically looking to use their cash to trade right away?
It doesn't sound like a viable business model for the type of customers they have.
What am I missing here?
>>1179807
Robinhood makes money in many of the same ways as traditional online brokerages. These include:
- Collecting interest from customers who choose to upgrade to a margin account. We are testing margin in beta and will offer margin accounts later this year.
- Accruing interest from customers’ uninvested cash balances. It is important to note that our customers are not charged.
Robinhood has raised $66 million from NEA, Index Ventures, Ribbit Capital, Vaizra Investments, Google Ventures, Andreessen Horowitz, Social Leverage, Box CEO Aaron Levie, Path CEO Dave Morin, Jared Leto, Snoop Dogg, Linkin Park, and Nas, which gives us the freedom to focus on building an outstanding experience rather than short-term profits.
>Google Ventures
They will mine the shit out of that app. That might be in the prospectus.
>Snoop Dogg
Isn't he broke?
>>1179822
>we make money off margin accountd that dont exist by someday lending money we dont have
>we make fractions of pennies from the $1.26 cash in your account
>we borrowed a bunch of money so profits dont matter lol right guys
yeah theyre fucked
>>1179809
I think they make you leave it for 3 days in between trades. But you're right I see all the accounts in the robinhood general and how much interest can they really make in 3 days on $100. I don't think anyone with real money would bother with them.
But I think they are O.K. their service can't cost anything to run.
>>1179837
There was 250k people in the margin acct line when they made it available. 1k in cash balance (it's more than this overall) would be $250 mil cash .
3%=7.5mm minimum on an extremely conservative interest rate.
>>1179885
>3%=7.5mm minimum on an extremely conservative interest rate.
I don't think so. We are in an era of ZIRP and for short-term, safe cash investments, they'll be lucky to avoid a negative interest rate.
If Robin Hood is an American company, it can get maybe 1% p.a. in something safe. Anything more will require taking duration risk, currency exchange risk, or some other kind of risk.
3 month US Treasury bills yield about 0.25%; 1 year bills yield about 0.50%; 10 year bonds yield ~1.75%; and 30 year bonds yield ~2.50%
Not even close to 3% unless you go way out on the yield curve.
>>1179837
3 day settlement is a rule from the exchanges so it's actually money that RH shouldn't be able to use.
>>1180172
hes talking about margin
>>1179740
Maybe you should call and talk to them. Robinhood is cool but they are going to have big problems with people moving on to better brokers. Once these young folks they attract become knowledgeable enough they are going to want margin and options and rh can't provide that at this point.
I don't think they will go out of business anytime soon but I think they will hit hard times in the future.
Another thing is now that they have created a market for fee free trading they could easily be destroyed if one of the bigger brokers figured out a way to copy them and do it better. Imagine if tda went fee free, Robinhood would die over night. For now they are safe in my opinion.
>>1179822
snoop dogg broke nah not in your lifetime
that's kanye west.
>>1180509
there have been free trade brokers in the past and they all failed
>>1182116
that was before the internet
but the internet makes costs zero right guys? I mean servers don't cost anything right?
.
actually if robinhood was smart they should be able to run the whole thing with 2 smart guys. But they won't, they will hire more coders, and managers, and staff, and web admins, etc.
