Berkshire Hathaways Charlie Munger takes another swipe at Robinhood

Charlie Mungers opinion on Robinhood HOOD -2.82%

Markets Inc. has not improved in the past year. If anything, it has become more negative.

Vice President of Berkshire Hathaway Inc.

BRK.B -2.55%

blew up the trading platform while speaking to thousands of shareholders at the company’s annual meeting in Omaha, Neb., Saturday. He said Robinhood has been losing ground since it was announced in July 2021.

“It was pretty obvious that something like this would happen,” Mr. Munger during a question-and-answer session with Warren Buffett, Berkshire Hathaway’s CEO and chairman.

“All the short-term play and big commissions and hidden setbacks and so on and so forth. It was disgusting,” Mr Munger said.

Munger has previously criticized Robinhood. In a February 2021 interview with The Wall Street Journal, he compared the platform to racetrack betting and said it was wildly speculative.

Mr. Buffett reminded him of the earlier remarks on Saturday.

“And now they are unraveling. God is becoming just,” Mr Munger said.

His comments came two days after Robinhood said its revenue fell to $ 299 million in the first quarter, down 43% from the same period last year. It was the company’s fifth quarterly decline in a row.

The online commerce app, which says it offers a commission-free experience, also said last week that it would lay off 9% of its full-time employees.

Jacqueline Ortiz Ramsay, head of public policy for Robinhood, hit back at Mr Munger’s recent comments.

“It’s sad to witness Mr Munger mischaracterize a platform and customer base that he knows nothing about,” she said in a written statement. “He should just say what he really means: Unless you look, think and act like him, you can and should not be an investor.”

Her statement over the weekend reflected the response she gave more than a year ago when Mr Munger began criticizing Robinhood over the way it had enabled and benefited from the January 2021 individual investment boom.

“In one fell swoop, a whole new generation of investors has been criticized, and this comment overlooks the cultural shift that is taking place in our nation today,” she said at the time.

Robinhood enrolled millions of investors during the Covid-19 pandemic. Now it struggles to hold on to them. The number of monthly active users on the platform decreased 10% in March compared to the same month the year before.

The company does not charge brokerage fees, but is instead dependent on the trading volume for turnover. It sends customer orders to high-speed trading companies in exchange for cash, in a practice called order flow payment.

Shares of Robinhood fell 2.8% on Friday to around $ 9.81. The stock has fallen nearly 47% this year.

Sir. Buffett asked Munger if it was wise to be so blatantly critical, to which Mr Munger replied, “Probably not. But I can not help it.”

Akane Otani contributed to this article.

Write to Ginger Adams Otis at Ginger.AdamsOtis@wsj.com

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