Robin The Hood
Once upon a time, retailer investors were subject to the slings and arrows — and price gouging — of their brokerage firm princes. The feudal landscape of retail investing was dominated by transaction fees, consultation fees, management fees … fees-fi-fo-fum!
(And if you’re wondering about the goldfish reference up above … here you go.)
But, in 2015, a savior (of sorts) arrived!
A legendary outlaw ripped straight from the pages of English literature crawled from the underbrush of Menlo Park, California. Robinhood offered free trading all across the land, and all was good … until it wasn’t.
As Batman’s Harvey Dent once said: “You either die a hero, or you live long enough to see yourself become the villain.” And a villain did Robinhood become … or at least, that’s how the narrative on Reddit and social media goes.
I’m not going to rehash the Robinhood/GameStop (NYSE: GME) debacle. Suffice it to say, Robinhood restricted users from buying GME and several other meme stocks, allowing retail traders only the option to sell those stocks.
It was hardly malicious, despite the Reddit conspiracy theories, but it was profoundly stupid and proof that Robinhood wasn’t capitalized well enough to handle the demand. In the end, it was a problem of Robinhood’s own making.
So, why are we rehashing the past on Robinhood?
Because, after it spent the past year basking in the limelight, Robinhood just confidentially filed to go public. Once Robin of the Hood, always Robin of the Hood, I guess.
But is it really covert or confidential when you post about it on your official blog?
I mean, Robinhood’s IPO was widely expected. We all knew it was coming. I guess Robinhood was just waiting until the worst of the GameStop drama died down. Either way, 2021 is an excellent year for Robinhood to go public. Hear me out on this one…
Amid the GME trading frenzy, Robinhood added more than three million users, according to JMP Securities. Furthermore, cryptocurrencies have never been more popular … and Robinhood is among the few brokerages that allow crypto trading for retail investors.
(Speaking of crypto, have you seen Ian King’s Next Wave Crypto Fortunes? I know. Shameless plug, so sue me. Anyway…)
What does crypto trading have to do with Robinhood? Well, Little Jon, crypto marketplace Coinbase is also going public soon. And, in a recent round of private-market trading, Coinbase was valued at $100 billion.
Granted, Robinhood isn’t as robust on the crypto side as Coinbase, but it offers so much more to retail traders than just cryptos. As for Robinhood’s valuation … its last financing round in 2020 valued the company at $12 billion. I have to think that value will rise simply based on Coinbase’s recent activity.
For now, investors interested in Robinhood’s IPO will have to wait for more information. We’re still in the early stages here. But that doesn’t mean we can’t speculate, right? Right!
On that note, we Sherwood like to know your thoughts! Is Robinhood really Prince Jon in disguise? Is Robinhood the king of outlaw investing? And will you buy the Robinhood IPO?
Write in and let me know: GreatStuffToday@BanyanHill.com! Of course, if you’re looking for a more direct way in on the crypto boom, say no more!
An estimated $24 billion could be unleashed on the crypto market. It’s a move that could send certain cryptocurrencies — especially bitcoin — soaring.
And our resident crypto expert, Ian King, is going to show you how you can play this next wave of crypto to potentially multiply your money 12 times in just the next 12 months. Check out Next Wave Crypto Fortunes right now! (Click here.)
Watch out, Asian chipmakers … Intel (Nasdaq: INTC) is back with a vengeance! The company just announced that it’s dropping $20 billion on two new chip factories in Arizona.
Given a global chip shortage and waning American dominance in the semiconductor sector, Intel’s stateside move is quite refreshing. That said, CEO Pat Gelsinger also noted an industrywide shortage of chip components, such as substrates. Did someone say “sand” investing? Yup … we did.
Just when you thought AT&T (NYSE: T) stopped thinking like an old-world media company … it goes and kills one of HBO Max’s biggest draws. The so-called “day-and-date” releases — i.e., simultaneous theater and streaming releases — are dead.
And we can thank Warner Media’s deal with Cineworld (OTC: CNNWF) for that step backward. Warner just signed a movie deal with Cineworld that creates a 45-day window of theatrical exclusivity. Disney (NYSE: DIS) is already eating your lunch, AT&T…
J.M. Smucker (NYSE: SJM) just signed a partnership with coffee king JDE Peets (OTC: JDEPF), and thankfully, it’s not for Goober-grape-java. Sure, jelly is Smucker’s bread-and-peanut-butter business, but the company also covers the ground coffee spread as well, owning brands like Folgers, Café Bustelo and Pilon.
How the duo plans to “aggressively pursue liquid coffee innovation opportunities” is still up in the air, and the deal’s haziness put the ol’ Smuckeroo in a sticky situation today, with SJM giving up nearly all the week’s gains. Though, consumer staples like Smucker generally do well in economic downturns and uncertainty — so if you need another value name for your roster, Smucker might be your jam.
While GME’s double miss in the earnings box surprised no one here on the ‘Stuff crew … Wall Street was somehow thrilled. GameStop management’s “excellent execution” compelled Wedbush Analyst Michael Pachter to bump his price target from $16 to $29 … while also downgrading GME to sell.
Why? Because GME’s price has “disconnected” from its fundamentals. What on earth gave you that idea, Wedbush? Captain Obvious called — he’s decided to make you an honorary lieutenant in the Obvious Army…
Last week, we asked for your thoughts on unplugging from our Plug Power (Nasdaq: PLUG) play after the company announced it’d restate its past finances. In other words, we wanted to know if Plug’s accounting apologies had you eyeing the exit … or if you’re staying plugged into the trade.
By the way, you’re not hurting my feelings here in these polls — the stocks in Great Stuff Picks are merely recommendations, and above all, you gotta do what’s right with your money. Capisce?
Disclaimers aside (the SEC won’t let me be, you see), they tried to shut us down on PLUG … but 73% kept hangin’ on like Vanilla Fudge. Diamond hands! Rocket emojis! Another 13% of you kept half and sold half, while the last 14% of you are out for the count.
Thanks for playing, for polling … for trading with your fellow Great Ones!
Now, for today’s likely more-divisive poll … let’s talk about that Robinhood IPO. Since the brokerage’s public foray is no longer a hypothetical scenario, would you buy Robinhood’s public market debut?
Sure, I know a few of you Great Ones out there have loudly (and proudly) aired your disdain for buying any IPOs — end of story — but that’s besides today’s point. With everything you’ve seen during Robinhood’s time in the media’s limelight limbo…
Will you buy Robinhood’s IPO? Click below and let me know!
Of course, if you have more thoughts on the ethical no-man’s-land that Robinhood wandered into, write to me! I wanna hear it all. Rant or rave away about Robinhood to your heart’s content.
GreatStuffToday@BanyanHill.com is your one-stop shop for your thoughts, complaints and zany trading plans. Hit us with your own personal brand of Greatness, and you just might see your words in bold virtual print tomorrow!
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Until next time, stay Great!
Joseph Hargett
Editor, Great Stuff