Robinhood Launches College Recruitment Tour As SEC Threatens More Regulation

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Robinhood Launches College Recruitment Tour As SEC Threatens More Regulation

With trading activity and the pace of new user signups both in decline, and SEC chief Gary Gensler seriously considering a ban on its core innovation, payment for order flow, Robinhood is desperate for a return to the explosive growth of 2020. So it’s turning to the demographic that has historically been its most reliable cohort of customers: teenagers and twenty-somethings.

With millennials already firmly in its camp, Robinhood is stepping out to try and recruit the up-and-coming Gen Zers by launching a college tour like they’re ESPN College Game Day. Robinhood executives are planning to tour community colleges and Historically Black Colleges and Universities this fall. Before that, the company is launching a new promotion: sign up with a college or university email, and you will get a free $15 to trade with (you can buy stocks, options, crypto – whatever) while also being entered into a series of drawings for $20K.

Already, young people make up the bulk of Robinhood’s user base. The median age of its users is 31. More than half of its users haven’t had a previous brokerage account. And nearly 4MM of them are students.

As investors probably remember from Robinhood’s lackluster earnings report, the company needs to do whatever it can to bolster trading activity (so both it and Citadel, its biggest client, can continue to prosper). Some scoffed at Robinhood’s boldness in targeting the young and inexperienced.

Hey kids, want some free candy? https://t.co/AMXw6ZUzSm $HOOD

— Spencer Jakab (@Spencerjakab) September 15, 2021

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When asked by WSJ, Robinhood’s top flack defended the college push, arguing that Robinhood was simply meeting its customers “where they are”.

Aparna Chennapragada, Robinhood’s product chief, said that the marketing push is a continuation of Robinhood’s long-term mission to make investing accessible to people who hadn’t historically participated in the markets. The campaign, she said, is about “meeting the next generation where they are” and communicating that by starting young, college students can enjoy the benefits of compound returns over decades.

The problem is that Robinhood’s app has been accused of “gameifying” investing, incentivizing unsophisticated investors into taking risks they wouldn’t normally take, or that they don’t fully understand. Robinhood is presently being sued by the family of a 20-year-old trader who racked up a …read more

Source:: Zerohedge.com

      

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