CNBC’s Jim Cramer stated Monday he thinks shares of Robinhood can be acquired at their existing levels, recommending the brokerage has an intense future catering to the monetary choices of more youthful individuals.
“As Robinhood branch off into other types of financing, consisting of ‘purchase now, pay later on’ cards, I believe [CEO Vlad Tenev’s] army of 22 million users will grow and end up being more effective,” the “Mad Money” host stated.
“That’s why I’m telling you that Robinhood can be bought here,” Cramer included. “If Square can rally 10% on this Afterpay deal, imagine what Robinhood could do if they acquired someone else in the industry — think Affirm. The stock would soar.”
Shares of Square rose one day after the fintech company behind the Cash App revealed a $29 billion, all-stock offer to purchase Afterpay, an Australian business that uses “buy now, pay later” services.
While gains of that magnitude are uncommon after a business exposes prepare for a perform an all-stock acquisition, Cramer stated it shows the self-confidence financiers have in Square’s development, especially around services like “buy now, pay later” that are popular with millennials and Gen Z.
In addition to Square, Cramer stated PayPal — which owns peer-to-peer payments app Venmo, a competitor to the Cash App — is another monetary services business that’s shown to be welcomed by more youthful generations.
“I think Robinhood could be next,” Cramer stated, as the business that originated free-commission stock trading broadens into other locations. Robinhood currently uses money management accounts, and Tenev informed CNBC recently he hopes in 5 years the business is “the most trusted and most culturally relevant money app worldwide.”
While Robinhood’s going public recently was viewed as a dissatisfaction, Cramer stated the business’s long-lasting story stays appealing. That’s due to the fact that “companies that target young people have scarcity value as investments,” Cramer stated, competing it likewise uses to the stocks of quick casual chain Chipotle, streaming gadget maker Roku and food-delivery app DoorDash.
“That scarcity value has allowed them to surge higher at a tremendous velocity” and bodes well for Robinhood, he stated.