If You Invested $1,000 in Robinhood at Its IPO, This Is How Much You Would Have Today
Time and time again, Wall Street makes the same mistake. A good idea shows up, and investors jump aboard with abandon and without taking the time to think about the subtleties of the business. The stock rockets higher, and then, when reality starts to set in, the stock crashes. That is why Robinhood (NASDAQ: HOOD) has been such a dismal investment since its initial public offering (IPO).
The big story with Robinhood was that it makes investing easy with an app-based interface and commission-free trading. Free trading was such a radical notion that the company's success in attracting customers basically forced other discount brokers to match its low costs. Essentially, Robinhood directs customer traffic to market makers that pay it for the privilege of executing the trades. This isn't unique to Robinhood, so there's nothing unusual in the practice. What is different is that Robinhood has been willing to base its business on just this revenue stream on the trading front.
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Source Fool.com
