Robinhood Markets (HOOD), mcap=$8.7bn, price $10.44 vs $9.38

$HOOD pitch:
– Robinhood is one of the best consumer products of all time, and the market is currently valuing its ongoing operations at just over $2bn, well below takeout value.
– A turnaround play in its current form.
– To turn profitable HOOD must (1) radically reduce expenses, (2) aggressively pursue larger accounts from the likes of $SCHW, $TD, $IBKR, and Etrade, (3) repair the brand so it is seen as a bona fide financial institution consumers trust.
– If they can execute well on those 3 objectives, HOOD is double from current levels.
– Potential takeout target – FTX has already been reported as being potentially interested and its CEO @SBF_FTX personally bought ~7.6% of the company.

$HOOD valuation:
– Robinhood has $6bn of cash & an EV of just over $2bn.
– In a takeout scenario worth $15-$20 based on precedent transactions & napkin LBO math.
– Precedent transactions have occurred at ~6-8x revenues.

Exp. gain: +100% to $15-20/share

Full HOOD write-up (free guest account required):

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