One day after Warren Buffett likened its app to a “casino,” Robinhood fired back, calling the revered investor part of an “old guard” trying to keep out new blood.
“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,” Jacqueline Ortiz Ramsay, Robinhood’s head of public policy communications, said on Monday (May 3) in a post on the company 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. But change is bullish. When she comes, no one can stop her,” she wrote. She also accused Buffett and his partner Charlie Munger of “disparaging everyday people for trying to take control of their financial futures.”
Buffett made his remarks on Sunday (May 2) at the annual meeting of his Berkshire Hathaway firm, saying there was “a very significant part of the casino aspect” at work with Robinhood. “American corporations have turned out to be a wonderful place for people to put their money and save, but they also make terrific gambling chips,” said Buffett. “If you cater to those gambling chips when people have money in their pocket for the first time, and you tell them they can make 30 or 40 or 50 trades a day, and you’re not charging them any commission, but you’re selling their order flow or whatever … I hope we don’t have more of it.”
Munger was apparently even more forceful, saying it was “godawful” that Robinhood would “draw investment from civilized men and decent citizens.”
Robinhood, which in March updated its platform to appear a bit soberer and shed some of its controversial glitz, has been criticized for its tactics before. But the company has also enjoyed exponential growth since 2020, with millions of people getting into investing during the COVID-19 pandemic.
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