Robinhood vs Coinbase IPO | Watch BEFORE Robinhood IPO

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goes up hey guys i just

heard that robin hood might be

officially revealing

their ipo docs next a week

this is really incredible because first

of all based on website analytic data

we've actually seen robinhood hit a peak

of website analytic data in around

january 28th

grow from there and lately it's kind of

been flatlining

but it's not declining when you look at

website analytic data

for companies like weeble or public you

actually see a decline in analytics data

so robinhood has been kicking butt

they're

consistently ranked at the top of the

app store for finance their top 10

in overall apps in the apple uh itunes

or apple

app store or whatever and folks i have

to say this ipo

is gonna be insane you know why it's

gonna be insane first of all coinbase

coinbase big disaster it was a not an

ipo it was a dpo so it was a direct

listing a direct offering which meant

there was no lockup and all the people

who wanted to become overnight

billionaires who were insiders at the

company were able to dump shares

and they can dump more shares than

retail buyers can buy this at the same

time as crypto is selling off

coinbase was a big ouchie ouchie and i

think it was because it was a direct

listing

had this been a properly priced ipo with

lockups

we wouldn't have seen the disaster that

we just saw at coinbase it's too much

cell saturation at one time

robinhood is going to be a traditional

ipo traditional ipo means they're going

to be shareholder lockups which mean

they can't dump shares day one they have

to usually stay for certain periods of

time depending on what position you have

or you can kind of tranch out over time

but here's the big thing coinbase was a

big play off crypto revenues

what i want to see at robin hood is how

much money they're actually making

off payment for order flow now in my

interview with vlad

the ceo of robin hood robin hood has

suggested that payment for order flow is

one of their highest income sources

we'll see

in the actual ipo filing now i want to

make it clear i think robinhood is here

to stay i know a lot of people do not

like robin hood

uh and and you know i don't really like

to take sides i just like to report the

information

uh i will say this uh a robin hood's

payment for order flow system

where essentially they can take our

orders uh and

work to get the best uh execution and

pricing

is something that has been very very

controversial we haven't gotten clarity

or light on what the difference is

between potentially best execution and

preferred or premium execution

is that just a rumor does it exist that

was a question that vlad the ceo was

asked on capitol hill

we never got an answer we never got

clarity that and the media never really

kind of picked up on insights on wait a

minute what is that difference

robin hood's ipo might reveal that we

might actually see okay

how profitable is payment for order flow

and a company like public

which is i believe public is getting

ready to raise

a another seed round or maybe they're

not even called seed rounds anymore

probably funding round

in the private market this robin hood

ipo is going to be

very very critical for valuing public

because

well although there's this like wrinkle

because not only is public trying to do

what robinhood is trying to do

public publicly told everyone that

they're not going to use payment for

order flow anymore

so how profitable is payment for order

flow at robinhood

so that is going to be a big reveal when

we finally get something called the

public s1 which is the statement of

intent to file it's all disclosures in

here

coinbases was like 700 pages long you

get

all of of the the devilish details and

all the good

is in this for robin hood so far we

don't know

anything about their financials how much

money are they making off

crypto are they making any money at all

of crypto or is crypto a lost leader for

them

because we've done experiments before

and robin hood has had

the best pricing consistently uh for

crypto purchases

and as we know on robinhood you can't

transfer out your token

but vlad has been suggesting introducing

a crypto wallet so people can transfer

their tokens

personally if i was robin hood i would

uh during my ipo go

yeah yeah we're going to have a feature

to let people transfer their tokens

but not do that until the ipo happens

because

what if people can transfer their tokens

and they move a bunch of coins out of

robin hood

i don't know maybe maybe they have a lot

of development to do it's totally just

speculation

now i want to be clear i support robin

hood going public i think it is going to

be

a phenomenal amount of transparency for

the company

and quite frankly i hope they do well

now i know there are going to be a lot

of people

on especially in our wall street bets

community in our youtube community

that are going to be looking to

potentially short this company

especially after what happened with

coinbase

the one thing that i would caution is go

to that s1

and compare what happened to coinbase

and so here's how you got to stack this

up coinbase had

high transactional revenues uh because

of cryptocurrency

however we expect those transactional

revenues because of cryptocurrency

to go down at coinbase and then other

revenues

like providing other services for

existing customers like lending or

whatever these sort of secondary

uh sources of revenue we expect those to

go up so while transactional goes down

we expect this to go

up and the goal is at least my vision is

that if i set transactional revenues

to zero at coinbase you take let's say a

70

growth rate on their non-transactional

revenues which

last quarter they grew at 129

so if you say hey coinbase can grow

these other revenues if they can

by 70 over the next four years this is

hands down easily a five

six hundred dollar stock it's not right

now it looks like crap right now because

we're kind of we're kind of in this

phase

where it's like down and then where's

that up gonna come until we get that

certainty on up coinbase is not going to

perform well

especially with the problems with lockup

but beyond that

the other thing to consider here is

robinhood's going to be different

we're not actually expecting robinhood's

transactional revenues to go down like

coinbase

so we can't directly compare robin hood

uh and coinbase

because i don't think robinhood's going

to have transactional revenues going

down

i think they're going to be on that slow

and steady up because that's what we're

seeing on the website analytics data and

we don't expect there to be that kind of

weird transition with the sort of a

convergence of fees that are made in

crypto i don't think robin hood makes a

lot of money in crypto

personally i think crypto is a lost

leader for them and they're basically

giving people crypto at cost

to get them on the platform hi there and

keep them on the platform

that's my guess for robin hood if that's

true and this company is insanely

profitable

at uh at uh you know their their stock

brokerage side

this could be a very big ipo now in

terms of comps

it's tough coinbase obviously was slated

to be this hundred billion dollar

valuation

and the darn thing plummeted

substantially because of what we just

talked about

uh i think we're under 70 billion

dollars in valuation now

robin hood privately has been valued

between 40 to 60 billion dollars in

valuation

and folks are kind of looking at oh what

if robin hood could potentially also be

a hundred billion dollar

uh company in which case an interesting

thing about robinhood the way their

shares divide

is their share price usually aligns with

their market cap

at least what i've seen in the private

market so like when they're valued at

around 40 billion dollars their shares

sell for around

40 which is kind of cool it's like easy

math

so if they end up getting a hundred

billion dollar valuation because they're

kicking butt with profits

and those profits are sustainable not

like coinbase where you're gonna see

this down

and then up which really when you get

the ultimate crossover of down and then

up

that's the point that you really wanna

buy coinbase is let the hype settle down

let it go down then load the boat more

dollar cost average down if you're in it

and then ride the wave up hindsight

obviously but also trying to have some

foresight on it

uh for robin hood i don't know that

we're gonna have that same pattern

who knows we'll see but it's all gonna

be in that s1

how profitable are they with payment for

order flow is an investment in robinhood

going to be

uh going to be worth it i don't know

we'll see when we get that s1 there's

gonna be a lot of research doing that

uh but i will say i think institutions

potentially have the edge of taking

advantage of

retail buyers who are gonna be pissed

off at robin hood so you're gonna have i

think a lot of

retail buyers trying to sell or short

robin hood as soon as possible

institutions are going to be looking at

the numbers and if the numbers are

really really good at robinhood

institutions are going to plow into

robin hood

uh whereas they're kind of doing the

opposite on coinbase because again

and then this right you got that that

inverted triangle like coinbase which we

don't think

robin hits gonna have so we just got

news that robin hood is planning on

releasing this filing next week

we'll see how it goes this is a big

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