ROBINHOOD - Long Term Exponential Potential
HOOD as a less favored stock has been bottoming in price for over 2 years....I believe the GameStop saga coming to an end and their rich product suite along with major growth presents a potential exponential opportunity
✅ Exponential Return Opportunity:
The price fell 78% from $85 to $6.81 and since June 2022 has built out a bottoming base making three higher lows in price. Hood has the potential to 5x or 6x from current levels to ATH’s or fall 40% to the all time low. Its small market cap of $9.78B means it can increase in multiples easier than larger brokerage firms such as Charles Schwab (bought TD Ameritrade) and Vanguard Group who are both in the trillions for market capitalization.
✅ Entering New Markets:
At the end of Q3 2023 HOOD entered UK Market offering their brokerage services there. The company is expanding it reach.
✅Aggressive Customer Acquisition Strategy:
There has been a surge in demand for their 3% IRA and old 401k rollover match which offers better interest returns than many of the other large IRA providers in the market. An aggressive marketing campaign has resulted in a 3 week backlog in applications (growing pains). These offerings require people to hold the funds in their IRA's in Robinhood for 5 years, and also be a Robinhood Gold member for 1 year. This will be great for retention of Assets Under Management (AUM) and could result in a sticky customer base.
✅ HOOD Credit Cards are coming:
The CEO has hinted at a release of Credit cards with zero fees to align with HOOD’s mission to democratize finance which may become available in early 2024. Limits may be based on income, not credit score, aiding poor credit access.
✅ Bad Press Dissipating:
Robinhood faced significant consequences for the GameStop scandal, including a fine of $57 million from FINRA and a class action settlement payment of $9.9 million. They have also settled another what appears to be potentially one of the FINAL lawsuits with Massachusetts for $7.5 million (Jan 2024). Some would argue that this closes off the GameStop event, whereby HOOD disabled long entries for GameStop stock to halt a rapidly rising short squeeze. Some people argue that HOOD had no option at the time but to halt trading as this was demanded by Citadel - Robinhood's market-maker partner (whose business would have taken a significant hit if the short squeeze was not averted). You have to wonder though, could this overreach occur again? And you have to wonder if the halt was not put in place could it have led to bankruptcy's which would have impacted a lot more general customers. HOOD is overhauling its digital engagement practices and intends to take steps to increase cybersecurity as part of its legal settlements. I don't agree with what happened however as a trader, with my trader lens on, bad news often presents great buying opportunities.
SUMMARY
The GameStop bad news event appears to be gradually dissipating and given the volume of customers onboarding, the expansion and growth the company is demonstrating, the new products being brought to market and how the chart appears to be basing over 2 years whilst establishing two higher lows, its looking like the bottom may be in. There is an exponential growth opportunity for all the long winded traders out there, strong support of POC and we recently got a bounce off the 200 day moving average on 16th Jan. A long term exponential trading opportunity is there to be had.
Thanks for coming along
PUKA
HOOD as a less favored stock has been bottoming in price for over 2 years....I believe the GameStop saga coming to an end and their rich product suite along with major growth presents a potential exponential opportunity
✅ Exponential Return Opportunity:
The price fell 78% from $85 to $6.81 and since June 2022 has built out a bottoming base making three higher lows in price. Hood has the potential to 5x or 6x from current levels to ATH’s or fall 40% to the all time low. Its small market cap of $9.78B means it can increase in multiples easier than larger brokerage firms such as Charles Schwab (bought TD Ameritrade) and Vanguard Group who are both in the trillions for market capitalization.
✅ Entering New Markets:
At the end of Q3 2023 HOOD entered UK Market offering their brokerage services there. The company is expanding it reach.
✅Aggressive Customer Acquisition Strategy:
There has been a surge in demand for their 3% IRA and old 401k rollover match which offers better interest returns than many of the other large IRA providers in the market. An aggressive marketing campaign has resulted in a 3 week backlog in applications (growing pains). These offerings require people to hold the funds in their IRA's in Robinhood for 5 years, and also be a Robinhood Gold member for 1 year. This will be great for retention of Assets Under Management (AUM) and could result in a sticky customer base.
✅ HOOD Credit Cards are coming:
The CEO has hinted at a release of Credit cards with zero fees to align with HOOD’s mission to democratize finance which may become available in early 2024. Limits may be based on income, not credit score, aiding poor credit access.
✅ Bad Press Dissipating:
Robinhood faced significant consequences for the GameStop scandal, including a fine of $57 million from FINRA and a class action settlement payment of $9.9 million. They have also settled another what appears to be potentially one of the FINAL lawsuits with Massachusetts for $7.5 million (Jan 2024). Some would argue that this closes off the GameStop event, whereby HOOD disabled long entries for GameStop stock to halt a rapidly rising short squeeze. Some people argue that HOOD had no option at the time but to halt trading as this was demanded by Citadel - Robinhood's market-maker partner (whose business would have taken a significant hit if the short squeeze was not averted). You have to wonder though, could this overreach occur again? And you have to wonder if the halt was not put in place could it have led to bankruptcy's which would have impacted a lot more general customers. HOOD is overhauling its digital engagement practices and intends to take steps to increase cybersecurity as part of its legal settlements. I don't agree with what happened however as a trader, with my trader lens on, bad news often presents great buying opportunities.
SUMMARY
The GameStop bad news event appears to be gradually dissipating and given the volume of customers onboarding, the expansion and growth the company is demonstrating, the new products being brought to market and how the chart appears to be basing over 2 years whilst establishing two higher lows, its looking like the bottom may be in. There is an exponential growth opportunity for all the long winded traders out there, strong support of POC and we recently got a bounce off the 200 day moving average on 16th Jan. A long term exponential trading opportunity is there to be had.
Thanks for coming along
PUKA