Robinhood Pushes Retirement Accounts as Movie Resurrects Its Past
Robinhood believes it has been “misunderstood.” A new movie might not help matters.
As The Wall Street Journal (WSJ) reported Saturday (Sept. 16), the trading platform is featured in the new comedy “Dumb Money,” which tells the story of the 2021 “meme stock” craze, and the company’s role in it.
The movie centers around January 2021, when individual retail investors, mostly organized through online communities, collectively bought and held GameStop shares, leading its stock price to reach astronomic levels.
“The movement gained momentum, and GameStop’s stock price became a symbol of defiance against Wall Street and the traditional financial system,” PYMNTS wrote earlier this year.
“Dumb Money,” the WSJ said, depicts Robinhood founders Vlad Tenev and Baiju Bhatt as living “the life of frat-bro entrepreneurs,” while the actual company hopes to grow up.
To do that, the report said, Robinhood has turned itself into a “financial supermarket” that features retirement accounts and 24-hour trading.
“Over the last two years, we have been a company that’s been fairly misunderstood,” Bhatt, the firm’s chief creative officer, told the WSJ.
“Over time, you’ve seen Robinhood transition into a company … that provides a comprehensive set of services for a wide range of our customers’ financial needs,” added Tenev, Robinhood’s chief executive officer.
The report says a rapid rise in interest rates, coupled with investor hesitancy to spend on stocks and cryptocurrency, have shaken Robinhood. The company’s monthly active user (MAU) numbers continue to fall, while trading revenue has dried up.
Robinhood announced last week that its MAUs for August came to 10.6 million. That’s down from 11 million at the end of July, and 13.3 million from August of last year.
And in August of this year, the company released earnings that showed it enjoying its first quarterly profit, but also losing 1 million monthly active users during the quarter, from 14 million at the same point in 2022 to 10.8 million. At the time, PYMNTS noted, Robinhood was at its lowest MAU level in the previous nine quarters.
The company’s user growth in the report last week — as measured by net cumulative funded accounts — had remained flat, 22.2 million for July and August and up just 1% year over year.
The WSJ report argued the company is still feeling the effects of the meme-stock craze, as many customers felt betrayed when Robinhood and brokerages like it halted trading on some popular stocks.
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