- Robinhood lashed out at Warren Buffett and Charlie Munger for criticizing its business model.
- People are tired of them acting like the only investing oracles, a company executive said.
- Both billionaire investors have dissed the brokerage for treating the stock market like a casino.
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Robinhood on Monday hit back at statements made by Warren Buffett and Charlie Munger at Berkshire Hathaway’s annual general meet held on Saturday.
Both veteran investors had called out the trading app for conditioning retail traders to treat the stock market like a casino and enabling speculation among them.
The brokerage said two iconic investors have insulted a new generation.
“If the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing,” Jacqueline Ortiz Ramsay, Robinhood’s head of public policy communications, wrote in a blog post. “And at Robinhood, we’re not going to sit back while they disparage everyday people for taking control of their financial lives.”
Millions of amateur traders downloaded the Robinhood app in the first quarter of 2021, dashing in to experience the “financial democratization” it promises.
But Buffett referred to Robinhood traders who entered the stock market over the last year and a half as “casino participants.” He criticized the trading app for taking advantage of gambling instincts, offering commission-free trades, and routing its orders to high-speed traders.
Meanwhile, Munger said it’s “godawful that something like that would draw investment from civilized man and decent citizens.”
The brokerage isn’t taking these statements lightly as it believes its platform opens up investing to a whole new class of investors that don’t need huge sums of money to make stock trades.
“It is clear that the elites benefited from a stock market that kept many families sidelined from participating while they amassed huge wealth from decades of investing – driving a deep wedge between the haves and have-nots,” Ortiz Ramsay wrote in the blog.
“Suddenly, Robinhood and other online trading platforms have opened the doors of financial markets to everyday people, deeply unsettling the old guard who will fight to keep things the same.”