(Personal opinion) You'd be very surprised by this announcement if you modeled Robinhood as a discount brokerage. You'd be less surprised if you modeled it as a gaming company. I think the second is, broadly, the correct mental model for Robinhood.https://www.bloomberg.com/news/articles/2020-04-16/robinhood-said-to-be-raising-new-funds-at-about-8-billion-value …
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What would a discount brokerage be thinking about the current state of the world: "#%()#% me (#%))#% me (#%)%#( me net interest margin drives this business and that relies on taking customer deposits and investing them almost risklessly. That word 'almost' is a scary word now!"
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Fun fact about 2008: e*Trade came about *this* close to going bankrupt because it got a little deeper than every other discount brokerage in that notably safe place to park customers' money: home mortgages.
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And so if you're CEO at a discount brokerage right now you're probably less enjoying the massive spike in new account signups (worth ~nothing to you today, nature of the model right) and instead paying *very careful attention* to your daily update on treasury risk.
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For more about discount brokerages, written in the distant mists of history (a year ago) where they actually charged for the product but at a discount: https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ …
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End of conversation
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lets let people borrow money to gamble!
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