The Truth | The Coming Robinhood IPO.

quick reminder to get 38 off with the

coupon code link down below for the

amazing programs on building your wealth

with private live streams and chat where

we get to talk together

check those out down below the coupon

code does expire on friday and the price

will be going up

well the cat's out of the bag robin hood

has a secretly filed for ipo

now the big question is do we even care

there is a lot of negativity regarding

robin hood surrounding the events that

unfolded on january 28th which also

happened to be my birthday

no relation obviously the gamestop

crisis

stopping uh people from being able to

buy gamestop stock

and options around january 28th led to a

temporary

exodus of people from robin hood now we

don't know if there was a net

exodus that is more people leaving than

coming in but

these things are going to be very

important when it comes to deciding

do we actually buy robinhood when the

ipo comes

and how the heck do we even value this

company we hear rumors that

this be this used to be valued at 12

billion dollars but maybe it's going to

be coming out at

40 60 80 billion dollars how much could

robin hood

possibly be worth well this is sort of a

first reaction video on

my thoughts in terms of how i would

value robin hood but first i want to set

a quick bit of groundwork

my hypothesis for robinhood my belief

and this is an unpopular belief i am

saying this as an investor

so take it for what it's worth as an

investor

when i think of robinhood i think they

have nailed options trading

and they are the platform that has

figured out how to do the cheapest and

easiest options trading maybe not

necessarily the cheapest i shouldn't say

that

but certainly the most simple options

trading they've got that down

when it comes to buying bitcoin they

hands down out of all of the tests that

i've done and have done a few more that

i haven't published on the channel

but you could just take a look at

cheapest way to buy bitcoin

on or meet kevin on youtube and you'll

see a video i made comparing at least

block fi

uh robin hood and another one and i've

done some of those tests similarly with

other companies

i plan to eventually release a video on

that but anyway spoiler alert

every single time robin hood is the

cheapest now the problem with robin hood

is uh

you don't actually have ownership

there's no crypto wallet right we don't

need

like this video is not to try to

encourage you to buy in robinhood

if you want more on that watch the other

video and you'll understand

my conclusion should you buy on

robinhood or not the conclusions in the

other video

but anyway the point here is robin hood

has made a lot of things very easy for

people and there are a lot of people

that don't invest in gamestop and there

are a lot of people who say i would have

never bought robin hood anyway

there are a lot of people who use the

robinhood

debit card which i don't know if that's

ever going to focus probably not but

uh eventually oh wait you can always

focus on something by just putting it

right next to your face see

i've never used this once but anyway

there are a lot of people

who have their options in their stocks

they auto deposit money in

or when they get money they pause it in

they spend it on stocks and they're out

of there they

may not even know what happened with

gamestop which sounds crazy

it's really concentrated though on

youtube and wall street bets

so now what i want to try to figure out

which is very difficult to do is

what percentage of people who are robin

hood members are

actually also on youtube and wall street

bets

is it percent kind of like how we might

feel

or is it more realistic that maybe five

or ten percent

of people who are robin hood users are

actually involved in the gamestop drama

and how many poor people signed up for

robin hood

during all of this drama see the other

thing that's crazy

and i learned this really early on in

marketing when i did my first tv

commercial

it was a tv commercial that i spent

forty thousand dollars on producing

and another fifty thousand dollars on

actually distributing and that was when

my

income was like 60 000 a year

like that was 2013 and in 2012 i made

60ish k

a year i think i net like 49 or 51

something like that

so the point is i spent a lot of money

on this tv commercial when i published

it

the world of warcraft community thought

i was making fun of world of warcraft

players they didn't know that i was a

warcraft player myself

and i was just making a contrast between

real estate agents anyway

i got a lot of hate on that video in the

world of warcraft community people

thought i was making fun of people in

world of warcraft

crazy thing though is that virality

actually

led people to call me interested about

real estate

and so there is something in the media

business known as no press's bad press

and that

sometimes when you have bad press you

can actually end up

with net more customers than when you

only have good press it's kind of like

would you rather have a really viral

video

that 50 percent of people hate but fifty

percent of people

love but it gets 10 million views

or and and you gain let's say 5 million

subscribers like that right or 5 million

loyalists you're like oh my gosh this is

the best thing ever because even if

you've got 10 million views you're

probably not going gonna get five mil

subs right

away but anyway would you rather have

that or rather make a video that

everybody loves but a thousand people

watch it

and maybe all of them subscribe right so

there is that

no press's bad press reality when it

comes to media

and i know this sounds crazy but we're

going to actually look at some data here

but i believe it's very possible because

especially since robin hood was doing a

promotion

during this controversy it's very

possible that robin hood

came out of this controversy even better

and stronger

than before the controversy because at

the time of the controversy robin hood

said they were going to consider

delaying their ipo

now there it seems like they're back on

track if anything they might even be

trying to expedite this

because they had such a good quarter one

speculation right

but let's take a look at some data

in order to take a look at some data

it's really useful to think well what

kind of data should we look at

in my opinion the first type of data we

should look at is

website traffic data relative to

competitors uh and so i like doing that

uh and then we can also look at some

search trends so let's go ahead and pull

some things up

so the first data set i'd like to look

at is robinhood.com website metrics

and what's fascinating here is the

fastest rate of growth that robinhood

has ever had

at least within the last three years has

occurred right here around the january

28th crisis now you have to know what's

happening at robinhood

robinhood had a promotion which they've

never had before where you would get

four free stocks with robinhood if you

signed up between january 23rd

and february 1st that promotion is now

over

but that is also right overlapping the

period of time they had a massive

controversy

so literally they have a massive

controversy the company goes into peak

media mode

and people are like oh wow they're also

giving out free for free socks and so

many people use it

if people are like hey i wouldn't have

bought gamestop anyway

they might end up signing up for robin

hood and quite frankly

the growth even though it's not as rapid

that slope that slope of the line there

is not as rapid anymore over here it's

flattening a little bit

it's not plummeting like their website

traffic is doing very very well

let's compare them now let's compare

them to robinhood weevil public and so

fi

now this is a little bit of an asterisk

because not all of these websites

let you trade on the actual website so

it's difficult to say we can

immediately compare uh robinhood.com to

some of the other brokerages because not

and i'm not familiar as much yet with

public and sofa i know they've got apps

but i don't know what you can do on the

website

so it's it's worth noting that we

shouldn't say that robin hood's better

because people spend 14 minutes on the

website but only two minutes on

let's say public because they could be

on the app right what we do want to look

at though

is an increase uh the green numbers here

which even though they do this stupid

little green arrow because it's green

even though it's pointing down this is

an increase so on

average over the last three months

compared to the prior three months

robin hood users spent an additional one

percent of time on the website

so we didn't really get much of a change

over time there

comparing uh weeble we don't have a

metric for but comparing public to

itself

we got a 30 increase in the amount of

time spent on

the public website which is very good

and at so far we had a 65

increase on time spent on website which

is very very good now if sofa

lets you do trading on their website

it's still half

of what robin hood says now i'm not

going to go into the other brokerages

because this is really just a first

impression video here

on my thoughts for robin hood now

remember robin hood's growth here

on the chart and take a look here at

weeble

notice that they had growth around this

period as well but

nowhere near the scale that robin hood

had and it's actually

slightly turned negative at the end

there whereas uh and and this could be

you know promotion based whereas robin

hood though

still pointing up let's look at another

one here public.com

went up substantially right here you got

a nice inflection point

but look at that flattening and slightly

turning down there at the end

and then so far so far is doing well a

nice increase here

also a tiny little bit of flattening but

not not pointing down yet

so these are important things to

consider is how are these

websites ranking amongst each other now

obviously

it's helpful to put all of these on the

same chart just so we can compare them

all together

i like starting with them individually

though because when you put them all on

the same chart

it can get a little bit messy a little

bit fast so anyway here's that chart

robin hood is the green weeble is the

yellow line right here

uh public is down here and so far is

here you can see that

sofa has actually had the slowest growth

in this space out of

all of them they've kind of been

floating around the space for a while

here

recently yeah they had a bump but

they're not growing anywhere near at the

rate that like a public is growing

public this is very very nice growth

basically from non-existence

to competing good that's good but

still weeble and public doing a little

bit of that curvature down

robin hood still dominating with

curvature pointing

up and a weeble i'm sorry and so fi

somewhat flat here on this particular

chart it's interesting this is good

information to take a look at

uh these are all website analytics now

uh another thing

is we've obviously had a lot of negative

attention regarding people wanting to

brokerage transfer out of robin hood

totally makes sense uh it's useful to

note i'll just keep myself hidden for a

moment here it's useful to note that the

google trends data obviously had a spike

right around the time of the crisis

but uh a lot of this has not lasted you

know people have kind of

stopped searching for this almost

entirely transfer now this one this is

not something i would ordinarily search

for because like this is what i search

for transfer out of robin hood because

that's what i would write

but google actually recommended this as

a breakout search term how do i cash out

on robinhood uh and so i thought okay

i'll click on that too and see that well

that has pretty much

disappeared as well uh and then if we

look at robinhood versus

versus public and robinhood versus

weeble assuming that people might want

to comparison shop

we can see weevil has a very very big

competition against robin hood for comp

you know comparing people comparing the

two public not so much

so far i didn't even rank on this it was

like a flat line uh but uh clearly you

could see the

interest in even comparison shopping

right now is declining

and look i'm not here to try to shill

robin hood i just i'm honestly surprised

like

i thought i would see user growth

decline uh which we don't actually have

user growth yet currently the

current numbers but i certainly thought

we would see website traffic data

decline

and that we would see uh search data

continue to stay stable of people

wanting to complete their transfers out

of robinhood

uh now we'll see we'll see once we get

more disclosures from robinhood

because see this to me is a little bit

misleading when we get this is from cnbc

this is a little bit misleading in my

opinion because this here says robinhood

leads in app downloads amid gamestop

frenzy

but this is actually in my opinion very

misleading because

there should be a footnote that says

robin hood ran

a get for free stocks promotion during

this time

and before the time they started the

promotion before this time

coincidentally at the same time and they

had never done that before so like

what would this line of actually look

like if there was no promotion

honestly i mean sure they had peak media

but would it have been like here you

know would it have been

negative i don't think it would have

been negative because i believe the

whole no press is bad press thing

but i don't think it would have been

this mad uh

if it weren't you know we probably

somewhere around here is my guess

my guess so this right here is probably

from promotion this right here would

have just been normal people interested

in signing up for stocks because they

just saw a bunch of people get rich off

gamestop and then get broke off gamestop

so

this is this is not an endorsement to

buy or sell gamestop okay anyway

focusing on robinhood how do we now

value this company so now we've got a

little bit more

background right we we realized that

okay i mean robinhood's traffic data is

still good

it's true maybe we are overexposed to

this echo chamber that can sometimes be

youtube that maybe we think

uh people hate robin hood more than than

they do

because because maybe a lot of people in

youtube and on the reddit community do

and that totally is understandable and

again we still don't really know what

happened on jan 28

but i get it but the rest of the world

is not here right

now the wall street journal here

mentions that robin hood had an internal

valuation in august of 12

billion dollars but they recently raised

3.4 billion dollars like this

while the gamestop crisis was going on i

doubt they were able

to raise 3.4 billion dollars without

that valuation

skyrocketing my guess and based on

estimates we're seeing online

based on new york times reports uh and

also cnbc

or wall street journal it seems like a

lot of folks are pointing to somewhere

around a potential valuation of 40

billion dollars for robin hood

but it could potentially even be more

than that see

the valuation of robin hood might be 40

billion dollars

internally but when this goes to public

markets and

robinhood shows how much profit they

make

which we don't know how much the profit

they make yet we don't even know if they

make money

we don't know how profitable they are

yet these financials are all sealed we

don't have them private companies so we

don't know

but anyway when those numbers actually

come out if they're impressive

i think 40 bills going to be a joke and

i actually don't think

that robin hood is going to value their

company for 40 billion when they go to

ipo

why do i say that well because i got my

hands on which i can't show on screen

but i got my hands on some private

equity data

somebody who bought shares inside of

robinhood

uh yeah off you know off-market sort of

pre-market

and uh the share price was 60 dollars

per share

and the implied valuation

was sixty one point three billion

dollars so that means somebody about

robinhood shares

at sixty dollars a share with a

valuation of

sixty one point three billion dollars

which is really really high it sounds

really really high right

but what if i told you this what if i

told you that those shares

sold in the pre-pre-market

in other words somebody was able to buy

these shares in the pre-market

before other people in sort of the

private market i shouldn't say

pre-market private market were able to

have access to them

and that when this was opened up to the

actual private market

there was a bidding war for these shares

and there was like

i think it was like a 20 million dollar

wait list on this platform

for people to try to get shares uh this

is just information that i'd gotten

i don't want to mention you know

platforms or or people or anything

involved

uh right now but the point is i think

there was somewhere around like five

million dollars of shares available to

be bought privately

and they had a backup of like 10 to 20

million shares or whatever in

over bid for those shares to try to get

their hands on those shares

so the appetite to get the people's

hands or for people to get their hands

on these robin hood chairs

is like really really really really

freaking high

i don't think robin hood's going to want

to leave that money on the table

certainly not

all of it now they're not going to price

at a premium because they want a big

opening day

but i would not be shocked to see

robinhood come out

with an 80 billion dollar ipo valuation

and then on ipo day robin hood

potentially extend

to over 100 billion dollars

now why would i say that that sounds

crazy right yes

i know it's going to come down to

profitability and comps

here's the thing paypal has 361 million

users they're worth about uh 200 this is

actually a billion i'm sorry

billions uh their current market cap is

278 billion

stripe which is a private company with

two million users which these are

different users so we shouldn't really

be comparing users

but stripe has a valuation of 95 billion

in the private market kind of like i was

describing this 60 billion

61 billion ish dollar valuation for

robin hood

that same thing for stripe is 95 billion

dollars and to make that clear that's

that was a

61.3 billion implied valuation yeah

share price 60.

okay anyway then square slash cash app

we have 97.9 billion dollars

so you have to ask yourself could

robinhood be as

big as cash app and square now cash app

and square have 30 million users

this is recent numbers or recent numbers

here

we don't know how many users robin hood

has right now we just know that in 2019

robin hood had 10 million users but

folks

kovid i would not be surprised if covid

has 3x this uh for robinhood

and if robinhood is at 30 million active

users even after the crisis of january

it would not shock me for robinhood to

have a valuation somewhere around what

squares is

now square has a lot of things going

they've got business integrations the

credit cards business which is somewhat

hurt by uh the pandemic maybe that'll be

a good reopening play

and when i say credit card business i

mean the credit card processing business

the merchant operating business the omni

channel where businesses can combine

their business inventories with online

inventories

their uh bitcoin ownership services

which

robinhood uses as well square actually

owns

a bitcoin which i don't think robinhood

does because i'm pretty sure they're

just using an index

uh or like a fund to track the price of

uh of bitcoin

but anyway the point is they have

differences

but they also have a lot of similarities

square

cash app they're coming out with a debit

card they just got a banking license

wouldn't shock me to see robinhood come

out with a credit card soon as well

we know they already have a high yield

savings well it used to be high yield

savings not anymore

and a credit card or sorry a debit card

is what they have right now

so it wouldn't surprise me to see 60

bill be

low based on these other valuations

because quite frankly when stripe goes

public

would not shock me at all to see stripe

be a 150 billion dollar company

just would not shock me at all and

square well i mean

the stock has been absolutely hammered

over the last uh you know a few weeks

here

in sort of this tech sell-off but if we

gave some of this tech

sell-off valuation back to see how

frothy things got

uh you probably want to add like 30 to

this which means square could be like

130 billion dollar company

all of a sudden it doesn't sound so

unreasonable for robin hood to maybe be

at 100 right

and it depends it's totally going to

depend on what the market does at the

time as well

now td ameritrade has 11 million users

the growth is pretty slow

and they're at about a 21.6 billion

dollar market cap on the canadian

exchanges

uh robinhood again latest sort of

private rounds

were over subscribed at 60 bill

uh and those are private sort of

secondaries like robin hood wasn't

selling those shares

this would be like an employee of robin

hood going yo i want to sell some shares

who wants to buy them and then a ton of

people going

uh and then eturo is a spec and they're

going public uh

through a spec i i'll look up what the

the name of this back was it's like ft

some fctv or something like that spec

anyway i'll i'll figure it out

uh etoro so anyway they they're a very

interesting platform and they got 20

million users

uh kind of exciting but

i don't they're more of like a european

international company they're not so

heavily used in the united states

so that could weigh on its valuation in

america certainly by american

speculators or investors whatever we

want to say

but then again in fairness backs have

been selling off like crazy i found it

the correct ticker symbol

is uh ft cv

so foxtrot tango charlie victor ftcv

is etoro 80 cents it's a spack

and spax have absolutely gotten

destroyed

destroyed uh in this latest sort of

spec crash that we're seeing so

this gives you some perspective on robin

hood

now this article actually did not have

much exciting in here i kind of just

talked a little bit about gamestop

talked about that 12 billion valuation

not too much useful in this one

but uh definitely made me think about

sharing some of my thoughts

on the robinhood ipo with you now stay

tuned i plan to release a video on

the lawsuits that robin hood is dealing

with from this whole gamestop crisis so

stay tuned for that

let me know if you're interested in that

i want to dig through the lawsuits and

see what people's claims are

how they're going and so on thanks so

much for watching folks we'll see the

next one

you