Valuation for Robinhood, Maker of App That Offers Free Stock Trades, Tops $5 Billion



Their monthly fee is for <50K margin debt. For anything above rate is 5% APR.

It’s much better than most other brokers, but much worse than IB.


IB lets you get a credit card that uses margin in your stock account. You can also setup your account to loan shares to short sellers. It’s automatic if you opt-in, and you can still sell the shares at any time.

I use the IB iPhone app for everything. The iPad app is actually better, but I don’t always have the iPad with me. You can build options trades pretty easily on the iPhone app. I do calendar spreads and everything in the app.


No matter Whether other brokers are giving options or margin or free trade, Robinhood made a dent in brokerage, and becoming famous to fetch 5B level.

Any way, I have not posted robinhood for its functionality or benefit, but to inform everyone there is a potential IPO company from Palo Alto, going to rock this bay area again.

This company, originally (first) funded by google VC, going to create two more Billionaires (founders) and many millionaires to bay area.

Reddit has got separate page for them


Oh…so, some people berating me for interests are paying 5%? Jesus! :sweat_smile::sweat_smile:

The things they don’t tell you are amazing. :wink:


When they pay such short term interest, they make triple or Quadruple amount as return.

As long as their (ROI - minus tax - minus 5% interest - invested amount) is greater than zero, taking margin is justified. The only is that they take additional risk as there is no free lunch.


They are just an ordinary brokerage, is my take. Interactive brokers has 30b$ valuation, and their service is superior, their market cap was 15b$ just a year ago.

I do not expect a lot from robinhood - they are not innovative, yet-another-brokerage - so far.


Some things stand out - Robinhood doesn’t have too many tech employees ( and few managerial level people) and yet have managed to make the business scale. They’ve also been fast to let users do bitcoin trading.


You don’t really need a lot of engineers for early stages in a product, in fact smaller is better.
“Business scale” -> I don’t know much, plenty of brokers existed. I used to use options house around 2013ish i think.

Overall, it tells me robinhood is mostly SV-valuations, not necessarily realistic.


I should buy some IBKR to put my money where my mouth is.


Only few companies are giving commission free trades, but they have limitations.

Robinhood does not charge any commission for trades irrespective of the amount. It is free lunch, who will not eat? Even with $100 people can trade, gain or lose, benefit out of robinhood.

This is a killer app, growing fast, make a dent in IPO debut, wait and see.


I will probably buy their IPO, but not for fundamentals reason :slight_smile:

Interactive brokers is cheap. Cheap is good enough. I want company i invested in have a proper business model and revenue stream.


Ok, just put orders IBKR calls Sep 65, will sell before earnings next month.


Facebook in correction territory. Time to buy?


Glad to know you understand why insurance companies do the same. No free lunch, they risk your money, but you don’t lose it for you.

Same as they do with your money, right? :wink:


Yes ! I heard data breach/data miss-usage (trump elections) brought down the FB.


Some say is because Mark has been selling everyday to raise funds for foundations. Actually, is he gifted to the Chan foundation which is doing the selling :slight_smile: to avoid tax. From the perspective of the market is the same, increased supply means lower price.


Chan foundation known, it may also be reason. I just heard the data issue/breach from bloomberg today. On any case, FB pulled all Nasdaq today.

If entire market sinks in 2-5 days, FB can go down further which we need to have comfort to handle. It looks risky and attractive too for FB.


Is FB a bottom drawer stock too? FB is well managed and is diversifying too (Istagram, WhatsApp, some office software, may be some home hardware stuffs)


Yes, that is why, IMO, it is attractive to buy today taking risk even if goes down !


I’m averaging in.