💰 Is Robinhood worth $40B+?


July 6, 2021

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The Hustle

Pro eater Joey Chestnut banked $10k Sunday after inhaling 76 hot dogs and buns in 10 minutes at Nathan’s annual contest in Coney Island.

The Washington Post estimates his intake at:

  • 20,520 calories
  • 1,102g of fat
  • 684g of protein
  • 50,160mg of sodium

Our only hope is that they were the low-sodium kind.

The big idea
Stock Market numbers

Robinhood’s $40B+ IPO, explained

Robinhood is having a wild 2021.

The trading app — founded in 2013 to “democratize finance” —  has empowered a whole generation of retail traders.

Those traders overwhelmed the app during the Reddit-fueled GameStop frenzy earlier this year. Just to keep the lights on, Robinhood had to raise $3.5B in emergency loans.

Well, Robinhood survived

And — last Thursday — it officially filed its S-1 paper for an IPO, with plans to trade under the ticker $HOOD. Per CNBC, it’s seeing significant growth:

  • Funded accounts reached 18m vs. 7.2m in March 2020 (+151%)
  • Assets under custody are $80B vs. $19.2B in March 2020 (+417%)
  • Revenue hit $522m in Q1 2021 vs. $128m in Q1 2020 (+309%)

More than 60% of its sales ($331m) come from the payment for order flow (PFOF), where Robinhood directs trades (e.g., equities, options) to market makers like Citadel Securities.

While a common practice in the stock market…

… PFOF is criticized for “lack of transparency.” This isn’t the only part of Robinhood’s business that is under the microscope.

The startup paid a record $70m fine to US finance regulator FINRA a day (!!!) before filing its IPO papers.

FINRA says Robinhood has caused “significant harm” to its customers, including the enabling of risky trading (via options) and misleading info around other trading tools (margin lending).

Robinhood is on pace for $2B+ in sales for 2021

That’s more than 2x last year’s take and a driving force behind a potential $40B+ valuation.

Robinhood notes a few interesting risks to its business prospects, though:

  • Class-action lawsuits related to actions the startup took to restrict trading during the GameStop episode (the Feds seized Robinhood CEO Vlad Tenev’s cell phone during a related investigation).
  • Dogecoin — the meme crypto asset — accounted for ~6% of company revenue in Q1 2021. Robinhood could take a hit “if the markets for dogecoin deteriorate” (this is actually in the S-1).

Like we said: Robinhood is having a wild 2021.

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SNIPPETS

Egypt got some tasty funding. MaxAB, a Cairo-based food delivery startup raised $40m in Series A financing and plans to expand across the Middle East and North Africa this year. #ecommerce-retail

Bird is lending a hand… in the form of accessible electric mobility vehicles for individuals with disabilities. The scooter startup is partnering with Scootaround to offer 1-14 day rentals plus exclusive discounts. #clean-energy

Is Fort Lauderdale boring? Elon Musk’s Boring company pitched the Florida town’s mayor on plans for an underground transit system, though there’s no formal agreement yet to break ground (quite literally). #emerging-tech

Anti-robocall tech is near. Verizon, AT&T, T-Mobile, and US Cellular met an FCC deadline to deploy STIK/SHAKEN, a caller ID authentication standard that’ll hopefully save everyone some stress. #privacy

Amazon famously has managers write 6-page memos instead of presenting PowerPoint decks. Trung broke down the company’s culture of writing in this thread. #hustle-picks

The results are in. Following Apple’s requirement that apps ask for users’ permission to be tracked, Android ad spend rose 10% while iOS mobile ad spend fell by ~1/3 between June 1 and July 1. #big-tech

Harry Hurst can’t get a visa. The British entrepreneur and co-founder of Pipe — which rapidly reached a $2B valuation — says he’s unfortunately not allowed to enter the US until next year, citing immigration hurdles. #fintech-cryptocurrency

Reading is in
kid reading

Source: Giphy

By some miracle, TikTok is getting kids to read books

Books are probably not the first thing that comes to your mind when you think of TikTok, where users are spending 24.5 hours of their time each month.

Yet the app has given rise to “BookTok,” a community of users who recommend and react to — you guessed it — books.

BookTok is no joke

The TikTok hashtag #booktok has 13B views.

Adam Silvera, whose young adult novel “They Both Die at the End” came out 4 years ago, saw a resurgence of interest on BookTok that sent it back to bestseller lists.

The TikTok hashtag #TheyBothDieAtTheEnd now has 37m+ views.

Silvera isn’t alone. Other young adult authors have seen spikes in popularity for their books on BookTok years after their initial release.

Barnes & Noble has noticed

And now almost every Barnes & Noble location has a BookTok table or shelf.

“We’re identifying these trends as big opportunities,” Shannon DeVito, director of books at Barnes & Noble, told NBC.

Kids — Here’s a tip: show this to your parents.

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Free Resource

Breaking down Glassdoor’s SEO

Glassdoor is the No. 1 search result for over 130k keywords. Wait, what?

It gets the inside scoop on businesses straight from the employees, so they’ve been crushing it for over a decade.

You probably went there on the last job hunt. 70m people do it every month for ratings, reviews, and thorough rundowns.

HubSpot’s got the the free funnel-hack*

* Or, at least on where it all starts: in the backwood of backlinks.

Backlinks = links from other websites that lead to your websites. These are a huge factor in ranking high on SERPs to generate more organic leads.

If you want to learn an invaluable SEO tactic, it’s better to take it from one of the best.

CAUTION: broken glass →
By the numbers
phone screen

Source: Darren James

Digits: A $50B glitch, a CEO’s inbox, and a floating hospital

  • More people passed through TSA checkpoints last Thursday (~2.15m) and Friday (~2.2m) than on those days in 2019. Guess that means we’re 🎶 relearning to fly (relearning to fly) 🎶.
  • Okta’s CEO has ~1k emails in his inbox after asking all 3.5k employees to personally share their vacation plans with him in a push to have people take time off.
  • A Louisiana family was (reasonably) surprised to find a $50B deposit in their Chase account. Unfortunately for them, it was just a glitch.
  • iPhone celebrated its 14th birthday last week. When it launched changed the world in 2007, Apple sold 270k units within 30 hours, and 1m+ in 74 days.
  • Global Mercy, the world’s largest civilian hospital ship, is approaching its maiden voyage with 6 operating theaters, beds for 200, and room for a crew of 641.
  • Deal or no deal? The world says “deal.” Global financial deal volume topped $2.82T through June, up 132% year-over-year with 28k+ deals announced.
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Meme of the day
Ramp Capital meme

Source: Twitter / @RampCapitalLLC

Two water-related events went viral over the weekend: 1) The Gulf of Mexico was “set on fire” after an underwater gas pipeline burst; and 2) Facebook CEO Mark Zuckerberg posted a video of him hydrofoiling while carrying an American flag for Fourth of July celebrations.

Naturally, the internet combined both stories into one meme.

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