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Published February 3rd 2022

Daily Brief - Who will buy Robinhood?

Robinhood’s market cap is currently $12bn. With 17.3M customers, that means that each RH customer is priced at $700.

By comparison, some of the largest brokerages out there spend north of $1,000 to acquire an active user.

Granted, the portfolio of the average RH user is $4k, a tenth of the mean Schwab account.

But these 17M users are special. And since 50% of our readers have a RH account, that includes you.

You are special
RH traders are special (and not in the funny way)

This cohort of young traders is - literally - the future of trading in the US.

To put things in perspective, let’s talk about another group of traders: the ‘old hand’, experienced traders. People in their 50’s or above who have been trading for decades and handle portfolios of hundreds of thousands dollars.

Many TOGGLE users fall in this category, they often engage our team directly and we have a great time talking markets.

For a brokerage, these “retail whales” are pure gold: they are active, smart and large.

When brokerages look at the traders on WSB they see the whales of tomorrow: 22M users who have the passion, activity and experience to become the next cohort of large traders.

Which is why buying them all in one go at a bargain price makes the most sense in the world.

You’ve seen companies like TastyWorks and Interactive Investor being snapped to the tune of $1bn+ recently.

So keep an eye on Robinhood.

Daily Brief - Who will buy Robinhood?

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