An anonymous reader quotes a report from Motherboard: Robinhood is seemingly still very popular. According to The New York Times, Thursday — the day of Robinhood’s strictest trading restrictions — was also its best ever: it saw over 177,000 downloads (twice the previous week’s daily rate) and had 2.7 million daily users. Robinhood also announced on Monday that it raised another $2.4 billion in a new funding round led by Ribbit Capital and including existing investors such as ICONIQ Capital, Andreessen Horowitz, Sequoia Capital, Index Ventures, and NEA. Bloomberg reported that the investment would convert into equity at a $30 billion valuation or a 30 percent discount on its initial public offering (IPO), and then would be followed by another $1 billion infusion converting to equity at either a $33 billion or a 30 percent IPO discount. Robinhood has been planning to go public in May since late last year, either through an initial public listing, a direct listing, or a merger with a SPAC.
The truth is that Robinhood has momentum, a hooked user base, and a business model that seems empowering for users but rather exploits them. In an interview with The Wall Street Journal, Robinhood’s senior director of product management Madhu Muthukumar said that the app’s gambling-adjacent interface is intentional and designed to “make it feel like something that’s familiar to populations that historically have not been served.” And for all the rhetoric around “democratizing” finance, Robinhood sells all its users’ trades to huge firms such as Citadel Securities which sees them before they are even executed on the market. Indeed, the SEC fined Robinhood $65 million recently for losing investors tens of millions of dollars due to its business dealings with market makers.
As Jacob Silverman writes in The New Republic, the troubles it’s facing now are unlikely to halt Robinhood’s advance. In a time of rampant poverty, precarity, and also absurd wealth, we are heading towards becoming a nation of gamblers hoping to strike it rich. That Robinhood’s siren call is more popular than ever should be read as a omen — the app is simply bringing more people to a casino when they have less to gamble with. And in a casino, the house always wins.
of this story at Slashdot.
Source:: Slashdot