Hey! In this video, I talk about a few reasons why I am not investing in Robinhood, and share some recent news on why the Robinhood IPO skyrocketed, and then crashed back down!
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The Robinhood IPO has been an anticipated public offering for many years now. A company that revolutionized the financial industry, being the first stock brokerage to offer commission-free stock trading, is finally publically traded. With the introduction of Robinhood, you and I, regular old people, can invest our money without paying a commission to the brokerage every time we want to buy or sell.
Now, despite forcing all other brokerages to offer commission-free stock trading and becoming a publicly traded company, Robinhood has had its fair share of issues in the past. In this video, I discuss three key points of why I personally am not currently investing in Robinhood. Here is the breakdown:
1)Outages + Lack of Consistent Service
Robinhood has struggled many times in the past with platform-wide outages, restricting us as investors from buying or selling stocks. As a platform that handles billions of dollars, being unable to move your funds how you see fit is extremely scary. How could a stock brokerage just shut down and restrict trading for days at a time? Robinhood's lack of being able to provide proper service to its users is just one reason why I am personally not investing in Robinhood at this time. But will Robinhood be able to move past its turbulent past? Only time will tell!
2)Sketchy Executive Behavior
In the first week of the IPO, many executives at Robinhood sold off significant amounts of their positions. The CMO sold off 100% of her IPO position. Vlad Tenev, the current CEO of Robinhood and the co-founder of the platform, sold off 7.2 million shares of his position for a whopping $275,000,000. And many others including the CFO and CPO sold off pieces of their positions as well. What do these executives know about Robinhood that we don't yet know? These large sell-offs don't inspire confidence in the company and are another reason why I am deterred from currently investing.
3)Poor Customer Service
This is a big one. A stock brokerage that handles billions of dollars not allowing its users to call them to ask a question? Only offering email service with response times of 24-48 hours between messages is atrocious. This is the main reason why I personally invest with Charles Schwab. Poor customer service is not going to fly for a stock brokerage and it is something that may influence the price of the stock over time. Robinhood has recently implemented a call-back service and is actively improving their service and capacities, but will they be able to scale fast enough? I guess we will find out!
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Nothing in this video is in any way financial advice. I am by no means a professional, nor represent myself as such. I am just a person sharing his thoughts on why I personally am not investing in Robinhood and sharing my personal experience with the brokerage. Do your own research before investing your money into anything. Once again, this is not financial advice.