Technology has never been able to bring us an accurate means of assessing someone’s intelligence. The IQ test is a loose guide at best, career status can be boosted based on where you got your start in life and how much Great Uncle Cornelius left you, and number of social media followers only generally provides an accurate metric for narcissism.
But today brings a chance in that world, as we now have a 100% accurate method of demonstrating whether a given person is an absolute twat.
Have they invested in the IPOs of Coinbase (COIN.Q) or Robin Hood (HOOD.Q)?
If the answer is yes, they’re an idiot, a berko of the highest order, an easily led, easily separated from their money waste of oxygen and genetic data.
Robin Hood IPOed today and was, in the first few minutes (and in breathless mainstream financial media profiles for days before) crowned a huge success. “Up from the IPO price!” yelled mini-pony-tailed TV commentator bros, their suspenders all a-quiver. “Robinhood now indicated to open on Nasdaq at nearly 4% above IPO price” bellowed Marketwatch, hoping to draw some SEO juice.
And then they all got Coinbased.
So what happened?
Same as Coinbase; the guys on the inside with all the cheap VC stock and fat stock options were waiting on a capitalization event to cash out, while people who actually look at financials weren’t necessarily keen to facilitate their exit.
“I would be urging investors to stay away,” said Hugh Tallents, senior partner at management consulting firm cg42. “There is an extreme amount of emotion around this stock” that Tallents said is clouding the fundamental picture. Among his biggest concerns is that he believes Robinhood will have to “spend a ton” to bring in new users, keep existing users and to develop new offerings to keep its users engaged.
There are multiple lawsuits and investigations going on of Robin Hood right now, including one looking into the CEO not being licensed with FINRA, the reputation of the company is shot after it stopped customers selling stock during the WallStreetBets run, and the financials aren’t all that impressive, considering it’s coming out of the gate at a $30 billion valuation.
The average account on Robin Hood is worth $240. At Schwab in 2019, the average account value was $267,609.
As of today, Robin Hood is worth 1/4 of of Charles Schwab (SCHW.NYSE) which, to me, seems to be a vast overvaluation of the newcomer. A more apropes valuation of robin Hood, for mine, would be $900 million, and only then because of their list of new investors which, properly managed, could grow fast in years to come, in the same way Uala is building a bank of ‘the unbanked’ in South America, signing folks up when they’re poor in the understanding they’ll still have them as they build wealth in the future.
Uala is growing super quick, expanding through several countries and competing with lumbering banks and their brick and mortar locations with an app that does everything a bank does only online. They DON’T have a poor reputation like Robin Hood, don’t have a CEO who can’t stop tripping over himself, and don’t have regulators all up in their grill. Their most recent valuation was $930 million – or 1/30th of Robin hood.
Coinbase was the same beast as Robin hood, just with a different pelt. They are one poor crypto run away from being unable to keep the lights on, yet they had the pony-tailed fin-bro douchelords all in a tizzy that they were coming to take over Wall Street – and what happened on day one?
The backers got out. They didn’t even wait, they just dumped stock and continue to do so anytime COIN gets a little ground under its stock price. If they’re not thinking the stock is worth holding, why would you buy?
Remember all the talk, not just from market guys but from cyptonerds as well, about how Coinbase was going to tear down Wall Street?
Where are they now?
Fintech is 100% a place where large amounts of money can be made, but the basic tenets of investing – that you buy at a good price, that you do some due diligence on what you’re buying, and that you DON’T CHASE – are as valid in fintech as they are in mining and biotech and cornering the market on ginger beef…
Get in early, get in with the right people, and get in with the right idea.
Word to the wise.. one of those is coming.
— Chris Parry