Is Robinhood safe?
That seems to be one of the top questions about Robinhood.
Robinhood deserves a lot of credit because it contributed heavily to the reduction of fees in the online trading industry.
I believe that if Robinhood didn't disrupt the industry, then trading fees would be substantially higher for all online brokerages.
Even so, people care about the present day, not the past.
Is Robinhood safe and is Robinhood still a good online brokerage in 2024 and 2025?
This YouTube video and article below it will tell you everything you need to know about Robinhood, the Robinhood app, and whether or not it's safe to use.
Is Robinhood Safe?
Robinhood is currently trading around $20 (as of September 9, 2024).
Its 52-week high is ~$25, which is a far cry from the $70 it was trading at in August 2021.
Investors and traders who deposit their money into Robinhood are protected against the company going bankrupt via the SIPC.
Robinhood Financial LLC is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
Even so, I definitely do NOT recommend Robinhood to anyone.
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My guess is that Robinhood will be acquired as a "tuck-in" acquisition by a strategic buyer.
With a Market Capitalization of less than $17 billion, a strategic buyer can pay $20 billion for Robinhood, an ~18% premium to the current equity capitalization, to acquire the company.
I'm sure that many investment bankers have already pitched this idea to acquirers.
Is Robinhood Dangerous?
No, Robinhood isn't dangerous. And yes, Robinhood is safe.
While Robinhood is safe and the trading brokerage is not a scam, I would NOT invest any money in Robinhood. I would, instead, look at more established and legitimate companies like E*Trade, TD Ameritrade, etc.
Robinhood seems like it's competitive position in the marketplace isn't as strong as it once was.
Competition from Webull and other brokerages, who have also cut their commissions, have made Robinhood less enticing to new traders.
Perhaps the meme-stock fiasco with GameStop caused a loss of investor confidence.
Whatever the reason, Robinhood is not a good online trading broker to trust with your money.
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Is RobinHood Safe? (Conclusion)
Robinhood is safe, but there are definitely better choices.
With their controversies of taking advantage of stock market investors and traders who use market orders, instead of limit orders, their GameStop controversy, and their stock underperforming many of their peers, Robinhood is not a brokerage that I would want to use.
Frequently Asked Questions (FAQs)
What is RobinHood trading at?
As of September 9, 2024 RobinHood is trading around $20 / share.
Did RobinHood recently have a stock split?
No, it didn't.
What happens if RobinHood stock price keeps going down?
If RobinHood stock keeps going down, then it will likely be bought by a strategic competitor.
How Can I Learn More About Options Trading?
Should I Trade Options During a Bear Market?
Yes, if done correctly, then trading options will enhance your returns and allow you to beat the market.
Is RobinHood safe from hackers?
Yes, RobinHood is safe from hackers.
Is RobinHood safe for crypto?
Yes, RobinHood is safe for crypto.
Is RobinHood good for beginners?
RobinHood is decent for beginners, but there are better choices.
What is the downside to Robinhood?
The main downside of Robinhood is that the it doesn't offer mutual funds or index funds. If you're a passive investor, then Robinhood is not for you, as it's geared primarily towards active traders and investors.
Also, RobinHood's stock has underperformed many of its competitors and it's also been involved in a number of controversies (GameStop and taking advantage of people using market orders).