HOOD $75 PT - Cognitive Dissonance

31 בדצמ׳ 2021

Thoughts below, future chart candles are just for fun -

• Cognitive dissonance driven by retail and news media's love affair together around hating the stock. If you set aside personal bias, they have a history of finding creative ways to add new users which get emulated by the competition (IBKR just got around to adding Instant Deposit). They're the most competitively positioned broker for future growth and they have the means to get there without raising additional capital anytime soon, as of the end of their most recent quarter Q3 they had 6 billion in cash and cash equivalents on their balance sheet.
  
• Banning Payment for Order Flow is unrealistic, the way things are leaning the SEC will require more transparent and timely public reporting of short selling data to regain public trust. Quicker settlement like T+1 has some traction as well, any improvement here is good for the HOOD.
  
• Large fund flows into the stock (D1 Capital, ARK) and short seller profit taking (Deutche Bank) appear to be underway, the next 13F filings will help confirm sentiment change.
  
• 2022 will see significant product functionality releases as HOOD grows out of its simple trading app for millennials image and gets accepted as a "real" broker with competitive tools.
  
• Fully embracing the crypto space, recent acqui-hire brings top talent to their crypto development team and suggests something big is cooking but they're holding their cards close. Most recent 10Q is vague around the product roadmap and mentions items which clearly diverge from the actions they're actually taking. You can barely consider them a crypto trading platform currently since they only have a few assets available and price execution is lousy. However, Robinhood has an opportunity to eat Coinbase's lunch, unless they squander it entirely.
  
• Just technical, reversion to Mean. It's no secret there's a significant divergence between individual stock performance and the mega-caps/indexes.