Disclosure: I have a small personal position in Robinhood common stock, use the platform for trading and have recently opened their credit card.

One can’t forget the craziness of Gamestop and Robinhood during the pandemic. One can’t forget the “free” trading being paid for by market makers like Citadel that Robinhood was called out for. However, you can’t help but notice what they are doing differently. The recent Gamestop news was a catalyst to check-in on the Robinhood stock. After a review and some use of their newer products including 24 hour trading, I do see a path to market share gains and stock appreciation.

What’s to like?

Aggressive push for assets. Robinhood provides a 3% boost on retirement account contributions. Robinhood provides 1% pay out on any deposits that STAY on the platform either via trades or savings. Robinhood provides a 1% boost on any retirement account transfers. Some are paid out immediately, some are paid out in time to ensure the funds remain in the account.
Credit card stickiness. The formal launch of the credit card provides a new revenue stream also a stickiness factor to existing traders on the platform. The product is impressive with immediate points redemption pushed to your brokerage account earning 5% in interest or ready for trading. The best part? The card pays 3% on every purchase. The card also offers a 5% cash back when booking travel but I have found the travel portal lackluster.
Subscription model. Just over 7% of the funded customers are part of the Gold club. The subscription model isn’t providing significant revenue but does provide a loyalty to the platform. This model can be credited with growing assets under custody and net deposit growth.

Are there concerns? Sure. Has the funded customer count growth been relatively weak? Yes. Can these incentives continue forever? Unlikely. My bet is the incentives for assets can continue for as long as needed to catch enough flies in the trap. And ultimately see significant stock price appreciation.