War Of Words Erupts Between Buffett & Robinhood

 

woman in red jacket holding white smartphone

Robinhood has been slammed over the past three years for misrepresenting its business model which it has claimed is "to democratize finance for all." Instead it caters to the gambling instincts of millennial and GenZ traders, while quietly selling their orderflow (a practice it was forced to disclose not too long ago) to the highest bidders. Bidders, such as billionaire Ken Griffin's Citadel, who then traded ahead of this mountain of bulk trading data to virtually risk-free profits: over the weekend. Warren Buffett also slammed the "free" brokerage, which nearly imploded during the February short squeeze mania, accusing the company of “taking advantage of the gambling instincts of society."

Speaking at Berkshire's virtual shareholder meeting on Saturday, Buffett said that Robinhood has become "a very significant part of the casino group that has joined into the stock market in the last year or year and a half."

The billionaire continued, saying that "it creates its own reality for a while, and nobody tells you when the clock is going to strike 12 and it all turns to pumpkins and mice," he said. He added there is "nothing illegal to it, there's nothing immoral, but I don't think you build a society around people doing it" and said he looks forward to reading the S-1 filing of Robinhood, which has filed confidentially for an initial public offering.

Buffett's faithful 97-year-old sidekick Charlie Munger disagreed, and unloaded on Robinhood saying it is "deeply wrong" and "god awful that something like that brought investments from civilized men and decent citizens."

But in a surprising twist, instead of taking the insults from the geriatric duo silently and stoically - as so many other corporations tend to do - on Monday morning Robinhood hit back against the billionaire duo, saying criticisms of the no-fee trading app by Warren Buffett and Charlie Munger were insults against younger investors, blasting the billionaires as out-of-touch elites who are "acting like they are the only oracles of investing."

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