Robinhood (NASDAQ:HOOD) will launch a new 24-hour trading service next week, making the company the “first brokerage to enable customers to trade individual stocks at their convenience — 24 hours a day, 5 days a week.”
The announcement came after the company laid out the goal of 24/7 trading recently.
Under the new 24-hour market, Robinhood would offer trading from 8 p.m. ET Sunday to 8 p.m. ET Friday for 43 securities, according to a report from the Wall Street Journal.
The new trading will roll out next week with all customers expected to have access by June.
Stocks confirmed to trade will be Apple, Amazon, and Tesla stock.
Robinhood has also applied for a Futures Commission license in March and expects to launch futures trading by the end of 2023 if approved.
“It’s the next step in evolving the market to how it should work, which is 24/7, and more like a piece of software rather than a brick-and-mortar institution that’s tied to U.S. east coast working hours,” Vlad Tenev told the WSJ.
“We’re continuing to ship aggressively, increase customer satisfaction, and deliver strong financial performance on the path to GAAP profitability.”
The company is hoping to gain some increased engagement from investors it had during the COVID-19 pandemic, according to the report.
Latest Robinhood News 2023
Robinhood (NASDAQ:HOOD) is currently being sued in a class action lawsuit by Klafter Lesser LLP, Pessah Law Group, and PC and Chelin Law Firm in California.
The firms are seeking to represent investors who held call options on the Robinhood trading platform as of the close on January 27, 2021 to purchase any of the following stocks:
American Airlines Group Inc. (NASDAQ:AAL), AMC Entertainment (NYSE:AMC), BlackBerry Limited (NYSE:BB), Bed Bath & Beyond Inc. (NASDAQ:BBBY), GameStop Corp. (NYSE:GME), or Nokia Corporation (NYSE:NOK).
The latest Robinhood class action lawsuit alleges that on January 28, 2021, Robinhood prohibited purchases of the stocks underlying the affected options on its platform and also prohibited purchases of the exercise of the affected options, and only allowed the closing out of such positions.
The lawsuit further alleges that during the period January 29, 2021 through February 4, 2021, Robinhood imposed significant limits on any purchases and continued to prevent the exercise of the affected options on its trading platform.
Consequently, the value of the affected options dropped dramatically and remained suppressed throughout the month, causing investors to suffer big losses, says the press release.
Robinhood might also have another lawsuit coming their way from AMC Entertainment.
The trading platform falsely published information stating the movie theatre company had filed for bankruptcy.
Macroaxis is giving Robinhood (NASDAQ:HOOD) a 74% probability of bankruptcy based on their analysis of the company’s current fundamentals.
Robinhood Markets probability of bankruptcy is used to show its chance of financial distress over the next two years of operations under current economic and market conditions.
As of May 4, 2023, EBITDA is expected to decline to about (1 B).
“Our calculation of Robinhood Markets probability of bankruptcy is based on Altman Z-Score and Piotroski F-Score, but not limited to these measures.
To be applied to a broader range of industries and markets, we use several other techniques to enhance the accuracy of predicting Robinhood Markets odds of financial distress.
The Probability of Bankruptcy SHOULD NOT be confused with the actual chance of a company to file for chapter 7, 11, 12, or 13 bankruptcy protection.
Macroaxis simply defines Financial Distress as an operational condition where a company is having difficulty meeting its current financial obligations towards its creditors or delivering on the expectations of its investors.”
Based on the latest financial disclosure, Robinhood Markets has a probability of bankruptcy of 74%.
This is 82.9% higher than that of the Capital Markets sector and significantly higher than that of the Financials industry.”
Robinhood Bankruptcy News
Recently, Robinhood falsely noted on its trading platform that AMC Entertainment had filed for bankruptcy.
“What the DUCK !!!!! I am getting multiple reports that Robinhood briefly posted today that AMC filed for bankruptcy.
How can companies like Robinhood do this?
So ludicrous, so wrong, so irresponsible.
On Friday, we report Q1 earnings, and will announce our sizable cash position,” said AMC CEO Adam Aron in a statement on social media.
The CEO even ran a poll suggesting suing Robinhood where more than 26,000 people supported the action.
Macroaxis has given AMC Entertainment a 10% less chance than that of Robinhood to file for bankruptcy.
Will Robinhood go bankrupt?
I personally doubt it, but the analysis conducted by Macroaxis is interesting nonetheless.
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Robinhood is an online investing platform that offers commission-free stocks with high-yield cash management offerings.
This popular stock market trading app does not charge commission for stocks and cryptocurrency trading.
Robinhood, the financial technology company offers trading in stocks, ETFs, other options, and cryptocurrency.
Moreover, this online brokerage provides web and mobile-based services which will allow you to invest and trade easily.
Additionally, the mobile-based services of this platform have made it stand out from its other competitors.
You may be wondering about many questions arising in your head about Robinhood & Robinhood stock.
Here in this article, you’ll find the answers to your queries and get to know all the details about this popular online brokerage like- How does it make money, the pros & cons of Robinhood, Robinhood stock price, the behavior of Robinhood in cryptocurrency & its future, and benefits of long-term investing in stocks & cryptos.
With more than 13 million users, Robinhood is the best platform for active investors or younger investors who want commission-free trading and investing on mobile.
If you want to invest in cryptocurrencies like Bitcoin, Ethereum, Dogecoin, you can use this mobile and web trading platform to invest long term.
Apart from it, Robinhood (a popular stock trading app) went public in July 2021 and its share price was set at $38 for IPO (Initial Public Offering).
Also, Robinhood was listed on the Nasdaq stock exchange under the symbol “HOOD.”
Recently, Robinhood’s CEO Vlad Tenev said that the company is planning to release the feature that allows customers to trade stocks outside of market hours.
The company named this feature, “Hyper-extended hours.”
According to Bloomberg, Robinhood stock is the favorite stock of Cathie Wood’s ARK funds and they’re purchasing the stocks every week since October 2021.
Last week, ARK Funds have bought about 2.45 million shares of Robinhood markets.
Robinhood Business Model- How the company generates income
With no minimum and no fees for trading in stocks, cryptos, and ETFs, the company has to generate income as a business to be sustainable.
This online brokerage makes money from market makers and some other ways.
Here are the ways through which the company generates revenue.
Payment for Order Flow
In 2021, the company generated 75% revenue through the process payment for order flow (PFOF), in which the company directs their customer’s orders equity and options to a particular market maker and the company receives payment for this compensation.
Hence, PFOF is the major income stream for the company.
Payment for order flow unfortunately plays against retail investors.
The SEC has talked about banning the practice since it allows market makers to manipulate the stock prices.
Stock Loan Income
Robinhood generates revenue by lending margin securities to counterparties.
Furthermore, the company keeps all money it generates from lending your stock and does not share it with you.
This is a big problem because large financial institutions make more money from the user while orders are processed through dark pools.
Borrowing Uninvested Cash
Robinhood generates income by borrowing uninvested cash and depositing this cash in interest-bearing accounts.
Membership Fees for Robinhood Gold
Robinhood Gold program is a paid subscription service that allows users to benefit from premium features like margin trading, Level II Market Data, professional research, and enhanced quick access to deposits.
It is also one of the income sources of the company.
Robinhood Gold costs $5 per month.
Also, it gives a free trial of 30 days.
What can you invest in on Robinhood?
Robinhood is a popular trading platform that allows the user to invest in stocks, cryptocurrencies, Exchange Traded Funds (ETFs), and options.
If you want to do commission-free trading in stocks, ETFs, and cryptocurrencies, then Robinhood is great for you.
Moreover, the company allows the investors to buy portions of stocks without paying the full share price.
It gives a free stock upon making referrals and opening the account.
When it comes to investing in cryptocurrencies, Robinhood allows to trade in several digital currencies including Bitcoin, BitcoinCash, Ethereum, Ethereum Classic, Litecoin, Bitcoin SV, and Dogecoin.
Most importantly, Robinhood has introduced IPO access for traders.
Besides, Robinhood does not offer the ability to invest in mutual funds, forex, bonds, and futures options.
The pros and cons
Simple, Easy to Use, and Easy to navigate
Free stock, ETFs, Cryptocurrency Trading
No account minimum
Cash management accounts
Margin investing and Fractional shares
Limited customer support
No mutual funds and retirement accounts
Limited investment offerings
Limited investing research and trading tools
The Pros explained
Robinhood, the popular brokerage in the US, is extremely easy to use and accessible for people of any age and any income.
Robinhood is a mobile-first company that differentiates it from other companies.
Its trading app and web-based platform are well-designed and more than enough to trade.
The new investors or inexperienced users can easily trade on it due to its simple and user-friendly features.
When it comes to costs, Robinhood provides commission-less trading with no minimum fees.
You can invest in stocks, cryptos, options, and ETFs for free.
Furthermore, the company offers fractional share trading, and you can invest in expensive stocks without much capital.
Additionally, it gives quick access to deposited cash.
The account opening process in Robinhood is fully digital and free.
Rather you get free stock upon opening the account and by referring the new members.
Last but not least, the company offered IPO access in July 2021 to benefit its users.
If you trade often, the savings can be huge on this platform due to the lower cost.
The Cons explained
Along with plenty of advantages, there are a few cons of it.
Robinhood does not offer to trade in mutual funds, bonds, and futures trading.
The research, educational resources of this financial company is limited.
It provides basic tools for the services and users can access professional research by purchasing paid membership of Robinhood Gold.
The customer support available in this stock trading app is limited.
Although, the company had made necessary improvements to its customer service in the last year.
The Robinhood scandal has blown up after the freezing of buying ‘meme stocks’ in 2021.
The company lacks full trust from retail investors after restricting the rights to buy specific stocks from its users.
Chief Marketing Officer Christina Smedley just sold 100% of her Robinhood stock. Do you know what the responsibilities of a CMO are? To generate revenue by increasing sales through marketing. You don’t sell your entire stock unless you don’t believe in that company anymore.
But that’s not all, there’s a list of executives who sold their stock too. When did all of this happen? All within the first week of Robinhood’s IPO, 8/4 to be exact.
Welcome to Franknez.com – today’s investing news, Robinhood stock. Things just got interesting.
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Shareholders Sell Robinhood Stock
Robinhood stock tanked on Thursday, 8/5 after several executives filed to sell their stock the previous day. The stock had risen past $70 and traded around $80 after hours.
I had actually seen this information straight from Andrei Jikh on Instagram stories where he posted a screen shot saying, “Wow, here are Robinhood’s executives selling shares.. This doesn’t inspire confidence.”
If you’re not familiar with Andrei, he creates finance videos on YouTube and has been featured in Graham Stephen videos before as well.
Andrei is a Robinhood user but has not yet invested in Robinhood stock. In a recent video, he mentions he’s happy he did not invest in HOOD stock on IPO day but that he is going to keep an eye on the stock for now and see how it performs.
Analysts Stay Cautious
Some analysts are staying cautious. “We cannot in good faith recommend investors get involved in HOOD on either the long or short side,” Wolfe Research analyst Steve Chubak wrote in a note, initiating coverage on the Robinhood with a hold-equivalent rating and a share price target of $45, via. Aljazeera.
So, is Robinhood stock worth the buy? First, ask yourself if these selloffs are something a confident company would do. Second, do you trust them?
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Robinhood stock, ticker symbol HOOD closed at $70.39 today. The stock has is dropping after hours. Today’s momentum reached 172 million in volume. Will HOOD stock be able to keep the momentum going?
Welcome to Franknez.com – today I want to discuss Robinhood stock news. Robinhood has been all over the place with the media. For the most part, it’s been negative. So, lets talk about it.
Robinhood Stock Surges Past IPO Price
Robinhood went public on Thursday, July 29th on the Nasdaq under ticker symbol HOOD. The stock’s IPO price was $38 but fell 8% it’s first day due to a massive selloff from IPO shares by none other than Robinhood’s own CEO, Vlad Tenev.
Robinhood is currently one of Fidelity’s “top traded stock” which has sparked a small chain reaction of investor interest. It’s no surprise the general public, who is unaware of Robinhood’s and Citadel’s malpractice in the market, have hopped on the Robinhood stock train.
Contrary to what mainstream finance platforms are saying, Robinhood stock has not been a top mention on Reddit’s WallStreetBets. This deceit has me thinking whether the media is trying to redirect retail investors to buy Robinhood stock.
A diversion if you ask me.
22 Million Users And Falling
The mainstream media fails to recognize that a massive community of retail investors is ditching the Robinhood app and using alternatives such as Vanguard and Fidelity.
Investors are also moving to exchanges such as Kraken for their cryptocurrency. Will ignoring these two factors prove to be a good idea for investors buying Robinhood stock? We’ll find that out with time.
But will it be enough? Big YouTubers in the finance niche have even stopped sharing their Robinhood referral links to their mass audience.
While large institutions and investors might be able to support their billionaire friend, retail investors have a different sentiment.
Retail Investor Sentiment
Reddit stocks are stocks the Reddit community loves. Go to r/wallstreetbets there is very little to no talks about HOOD stock. The little there is isn’t positive at all.
Retail investors don’t trust the company anymore and for that reason, Robinhood is NOT a Reddit stock.
Robinhood will grow if new retail investors flock towards the app again and if they invest in the stock. However, retail investors are warning new retail investors about the GameStop and AMC manipulation.
With several 100/100 short squeeze scores, AMC’s short squeeze has been prolonged through numerous naked shorting tactics behind dark pool data.
So, although Robinhood has a rather great app interface, the new generation of retail investors ties them too closely to Citadel Securities; the hedge fund who tried to bankrupt AMC and GameStop.
Let me know what you think
Are you investing in HOOD stock? Where do you think Robinhood is headed? What would make you trust in Robinhood again?
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Robinhood went public on Thursday, July 29th. The company is currently facing massive scrutiny over the Citadel-Robinhood market manipulation. Retail investors were prohibited from purchasing GameStop and AMC stock early this year as the affiliate hedge fund partner, Citadel, lost billions during the beginning of the momentum rally.
Retail investors continue to hold and buy the stock in efforts to squeeze shorts out of their long-short positions. The novice investor is no longer looking to invest with Robinhood’s trading app but rather moving towards a more secure and traditional way to invest.
Brokers such as Vanguard and Fidelity are becoming more popular as they provide new retail investors with peace of mind when it comes to buying the stock they want. Now, Robinhood has an entire community of momentum traders betting against the company as a whole. And while not everyone in the community is upset with Robinhood, the negative sentiment within the community weighs heavy.
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Robinhood’s stock ticker symbol, HOOD, started trading at $38 before falling to around $34 per share. The company currently has a market cap of $31 billion dollars. Robinhood’s expected valuation sits at approximately $35 billion dollars. David Trainer, Chief Executive of New Constructs believes the company is overvalued is worth more around $9 billion dollars.
“We think the stock is worth no more than $9 billion and that Robinhood will likely not be able to continue the robust growth it saw in 2020 due to looming regulatory risk, increasing competition and an undifferentiated service.” – David Trainer
As a retail investor who has seen the manipulation behind AMC and GameStop stock, I believe Robinhood is going to have an upper hand during its initial growth before finally tumbling.
“What’s weird about today,” said Carnegie Mellon University associate professor of finance Bryan Routledge, “is there was no news other than the shares started trading. That is puzzling.”
So, there’s already some concern as to why HOOD stock is gaining traction at the moment.
Robinhood IPO – Worst Debut in History
According to experts, Robinhood has had the worst IPO in history dethroning the 2007 IPO of MF Global Holdings Ltd which ended its first day down 8.2%. Robinhood’s was 8.4%.
Luckily for Robinhood, Cathie Wood, CEO of Ark Invest purchased $65 million dollars worth of HOOD stock. This volume pump might be the reason why HOOD stock is trending upwards at the moment.
What’s preventing investors from buying HOOD stock is the lack of leadership in the company. Vlad Tenev, Robinhood’s CEO, has failed to take responsibility for buying restrictions early this year. What angered retail investors was more so that the platform prevented them from buying only momentum stocks (meme stocks).
The community has felt an insane amount of market manipulation all year with no help from regulators regarding the naked shorting and overleveraged positions and dark pool trading.
Will Robinhood Stock Go Up?
Robinhood would need to continue growing for its stock price to go up. Investors would need to deem HOOD stock not risky and believe in the company’s vision.
However, Vlad Tenev is under high scrutiny at the moment. The link that’s missing or broken, is trust.
“We won’t prevent you from selling shares you get through the IPO Access program,” the company said on its website.
“However, if you sell IPO shares within 30 days of the IPO, it’s considered “flipping” and you’ll be restricted from participating in IPOs for 60 days.”
Vlad Tenev, CEO of Robinhood flipped his own IPO shares the same day the company went public.
Should You Buy Robinhood Stock?
I personally couldn’t invest in a company leader that was a culprit to freezing momentum trading to prevent a hedge fund from losing more money than they’d like to. The hypocrisy behind Robinhood’s IPO flip also doesn’t align with my values. And for those reasons I’m out.
Can Robinhood be trusted?
In my personal opinion, no. Robinhood is an affiliate partner to one of the biggest hedge funds shorting both AMC and GameStop stock. These short sellers have driven the stock prices down through manipulation tactics such as naked shorting and dark pool trading.
As AMC and GameStop share prices began to surge, Robinhood restricted retail investors from buying the stocks. When questioned, Vlad denied protecting its hedge fund affiliates. Retail investors and large influencers such as Elon Musk were quick to see past the CEO’s story.
From what I’ve seen, Robinhood has an amazing platform layout which makes the shame that much bigger. Vlad could gain the trust back from retail investors by uncovering the manipulation that went on with it’s clearing house, Citadel Securities.
Be sure to subscribe to the blog so you’re notified when a new article is published. Franknez.com is publishing weekly articles on stocks to buy, stock market and finance news, momentum trading, and entrepreneurship posts.