CNBC host Jim Cramer has warned that retail trading behemoth Robinhood is still plagued by its reputation as a haven for dopamine-fueled speculation.
The critical commentary arrives on the heels of the company’s stock tumbling by roughly 8% following the company’s disappointing Q1 report, which showed a rather dramatic plunge in revenue.
“Gunslingers all over the place”
According to Cramer, Robinhood is struggling to distance itself from its crypto-heavy roots.
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“HOOD–can’t change the crypto perception just yet and now doing predictions market,” Cramer wrote. “Gunslingers all over the place there.”
Robinhood’s user space famously has a penchant for speculative assets. The platform rose to prominence due to the popularity of meme stocks and crypto. Now that these two trends have waned, Robinhood is heavily relying on prediction markets. However, according to Cramer, Robinhood is only reinforcing its “Wild West” image instead of shedding it.
Cramer is not the only Wall Street figure criticizing Robinhood’s business model this week. As reported by U.Today, prominent wealth manager Ross Gerber recently lambasted the company as “nothing more than a casino.” The longtime Tesla investor has argued that Robinhood ultimately profits when its users “gamble and lose” on options, crypto, and betting.
According to Robinhood’s Q1 report, the company posted a 15% year-over-year increase in total revenue to $1.07 billion, but it missed Wall Street’s estimates. This was primarily due to a staggering 47% drop in crypto trading revenue, which plummeted to $134 million from $252 million a year earlier.
Robinhood CEO Vlad Tenev has made it clear that the company is becoming a diversified financial services “super app” that will no longer rely on cyclical trading spikes.
Source: https://u.today/cramer-robinhood-cant-shake-off-risky-crypto-image
