Is Robinhood's Reputation 'Tainted'?

MarketGauge Group’s Michele Schneider said the popular retail brokerage Robinhood Markets Inc HOOD has a “tainted” reputation.

What Happened: In an interview with CoinDesk last week, Schneider shared her thoughts on Robinhood’s new crypto wallet and the recent regulatory scrutiny surrounding the platform.

While she said Robinhood “definitely deserves some credit” for being pioneers in commission-free trading and being able to capture the retail investor market, she isn’t so sure that success will continue.

“We seem to feel here their [Robinhood’s] reputation is tainted,” said Schneider.

According to her, “the more savvy investors” are likely to continue using crypto exchanges like Kraken and Coinbase Global Inc COIN.

If anything more comes out from SEC Chair Gary Gensler, forcing Robinhood to make some changes in terms of order flow, then newer retail investors will “flee quickly” from the trading platform, Schneider said. 

“We’re not using it [Robinhood], but it’s still the name brand, so to speak, of what people go to who are new investors and that could change as more options are still available, and probably even a little more viable because they don’t have that tainted reputation as I say.”

HOOD Price Action: Robinhood shares closed 2.43% lower on Thursday at a price of $42.08. The stock was down another 1.16% at $41.59 Friday morning. 

Photo: Anastase Maragos on Unsplash.