Speaking at Berkshire Hathaway’s annual meeting, Buffett said there has been “a very significant part of the casino aspect” from the popular retail investor-friendly app.
“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, according to CNBC. “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.”
The way Robinhood gamifies investing has been a common point of critique for the site, CNBC reported. The company also landed in hot water after it shut down trading on popular meme stocks in January when the clearinghouse began asking it for copious sums it could not pay as the frenzy of trading continued.
But the site has also grown exponentially in the past year and a half, with millions joining up during the pandemic.
“Buffett said he was unhappy to learn short-term stock options activity in Apple’s stock was surging,” CNBC reported, adding Buffet said he figured much of that was happening via Robinhood. He said there is “nothing illegal about it, there’s nothing immoral, but I don’t think you’d build a society around people doing it.”
Robinhood added 6 million new users in the first two months of 2021 alone as GameStop interest was hitting its peak, PYMNTS reported. That was an upswing from the former numbers of around 200,000 per month. The service lets people buy and sell cryptocurrencies, and the company also said it would be adding a new feature allowing customers to deposit and withdraw them for transfers from other wallets.