There has been a lot of news around Robinhood lately.
There has been a big drop in the HOOD (Robinhood) stock recently, and I wanted to share my view.
I have done quite a few tutorials about Robinhood in the past, and I do think they have done a lot for this industry, including becoming one of the first brokerage companies that offers commission-free trades.
The purpose of this video is purely to give my thoughts about its current state of the stock now.
*Note this is not "advice" or 100% guarantee, but thoughts about possibilities.
What Robinhood has pioneered
1. They were amongst the first to start commission-free trading, which led many other brokerage accounts to follow suit
2. They don't have a minimum amount to have in your account, which many other brokerage companies do
3. They allow fractional trading
4. They give away free stock for people joining the platform - click here to get yours if you don't have one already
Reasons why the stock may continue to fall
The stock opened up in July, 2021 at about $35 and shot up, but now has been coming back down ever since.
1. Their server can be unreliable
For example, on some of the most highly anticipated stocks their server/platform shut down and people couldn't trade.
Because of that, they have lost confidence from their traders.
This is usually a platform for beginners and not for those seriously trading.
2. It seems Robinhood may have been in bad company when AMC & GME were shooting up, perhaps even stopping people from buying the stock
We aren't sure of the details of course, but the fact that there is a lot of bad news around it is not good for the company stock.
3. They take order flow payments
As a personal example, I would look at Robinhood stock and compare another broker I had and it would seem more expensive. This could be because they didn't have access (at least at the time) to all 7 markets or because they also routed their buys to the market makers.
They stay commission free by taking these payments BUT if they can't continue to do so they may need to instigate commission.
Their user base grows strong by getting free stocks but what happens if they stop? Or if you no longer want to recommend them?
These are just my thoughts and what I see based on the chart.
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