CNBC host Jim Cramer said, warned Retail trading giant Robinhood continues to suffer from its reputation as a haven for dopamine-fueled speculation.
The critical comments came just after the company’s stock price fell about 8% following the company’s disappointing first quarter report, which showed a fairly dramatic drop in revenue.
“Gunslingers everywhere.”
Cramer said Robinhood has struggled to distance itself from its crypto-heavy roots.
“HOOD – Still not able to change the perception of cryptocurrencies and now running a prediction market,” Kramer wrote. “There’s gunslingers all over the place.”
Robinhood’s user space is famous for its penchant for speculative assets. This platform became famous due to the popularity of meme stocks and cryptocurrencies. Now that these two trends have subsided, Robinhood relies heavily on prediction markets. But instead of shedding its “Wild West” image, Kramer says Robinhood is reinforcing its “Wild West” image.
Cramer isn’t the only Wall Street figure to criticize Robinhood’s business model this week. As reported by U.Today, prominent asset manager Ross Garber recently accused the company of being “nothing more than a casino.” The longtime Tesla investor has argued that Robinhood ultimately profits from users “gambling and losing” on options, cryptocurrencies and gambling.
Robinhood’s first-quarter report showed the company’s total revenue rose 15% year over year to $1.07 billion, but fell short of Wall Street expectations. This was primarily due to a staggering 47% decline in cryptocurrency trading revenue, which plummeted from $252 million in the same period last year to $134 million.
Robinhood CEO Vlad Tenev said the company is becoming a “super app” for diversified financial services that doesn’t rely on cyclical trading spikes.
