Robinhood’s sinking value is proof that ‘free’ can often be very costly

Please wait 0 seconds...
Scroll Down and click on Go to Link
Congrats! Link is Generated

One thing I love about fintech is the promise of unlocking more tools for more people. In a broad sense, the current era of fintech has done just that — people around the world now have access to financial services that were earlier either completely out of reach before, or, at a minimum, prohibitively expensive.

Neobanks, fintech APIs, new savings programs, infinite cards for different payment methods, stablecoins for cross-border payments, cheaper fiat transfers and, of course, zero-cost trading have improved how the average person can use, store and interact with money. It pretty much rules.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

The tech has proved darn neat, but there are some issues on the business model side of things. As it turns out, not charging for what was once a paid service is a great way to accrete customers, but it’s also an at-times tricky way of making money. This is a lesson that Robinhood is in the process of learning — and as a public company, sharing with the rest of the world.

This week, Robinhood reported Q1 earnings that were far under street expectations. CNBC notes that the company’s per share loss of $0.45 was $0.09 worse than analysts’ expectations, and that the company’s revenue result of $299 million was off by around $57 million. Shares of Robinhood are trading sharply lower this morning.

Parsing the Robinhood earnings presentation this morning, it’s clear that the equities trading boom that powered its hypergrowth has passed. And, of all the company’s products, the most durable remains its most controversial — yes, Robinhood’s options trading revenues once again accounts for the majority of its transaction income, following declines in the value of stock trades and crypto trading activity.

Post a Comment

Read also:
Flash Sale! Do Shopify customization or bug fixing. Get It Now
Cookie Consent
We serve cookies on this site to analyze traffic, remember your preferences, and optimize your experience.
It seems there is something wrong with your internet connection. Please connect to the internet and start browsing again.
AdBlock Detected!
We have detected that you are using AdBlock Extension in your browser.
The revenue we earn by the advertisements is used to manage this website, we request you to whitelist our website in your AdBlock Settings.
Site is Blocked
Sorry! This site is not available in your country.