One thing that I love about fintech is a promise to open more tools for more people. In a broad sense, the current era of fintech has done just that – people all over the world now have access to financial services that were previously either completely unavailable or at least prohibitively expensive.
Neobanks, fintech API, new savings programs, endless cards for different payment methods, stablecoins for cross-border payments, cheaper fiat transfersand of course, zero cost trading improved how the average person can use, store and interact with money. These are pretty much the rules.
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The technology has proven to be pretty damn convenient, but there are some issues with the business model. As it turns out, not charging for what was once a paid service is a great way to get customers, but it’s also sometimes a difficult way to make money. This is a lesson that Robinhood is learning – and how a public company is sharing it with the rest of the world.
Robin Hood this week first quarter earnings report which were far from street expectations. CNBC notes that the company’s loss per share of $0.45 was $0.09 worse than analysts expected, and that the company’s $299 million earnings were about $57 million lower. Robinhood stock is down sharply this morning.
Breaking down this morning’s Robinhood earnings presentation, it’s clear that the stock trading boom that led to its hypergrowth has passed. And of all the company’s products, the most durable remains the most controversial – yes, Robinhood’s. options trading income account for the majority of transaction revenue again after the decline in the cost of equity transactions and cryptocurrency trading.
Credit: techcrunch.com /