Warren Buffett and his right-hand man Charlie Munger are taking some flak from online trading platform Robinhood.
Buffett and Munger together co-chair Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B).
The legendary investors, now both in their 90s, are largely traditionalists when it comes to their investing style. Berkshire is known for buying quality companies at competitive prices and holding on to them for the long haul.
Little wonder then that the nonagenarians are no big fans of Bitcoin, to say the least.
During Berkshire's annual general meeting, which took place in virtual space on 1 May, Warren Buffett also expressed his dismay with Robinhood. Buffett said the online trading platform has exacerbated the "casino aspect" of share market investing.
Image source: Getty Images
How did Robinhood respond to Warren Buffet?
Following Warren Buffett's snub, Robinhood is firing back.
As Bloomberg reports, Robinhood's head of public policy communications Jacqueline Ortiz Ramsay fired off a blog post saying:
People are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing. 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… At Robinhood, we're not going to sit back while they disparage everyday people for taking control of their financial lives.
Ortiz Ramsay noted that most of Robinhood's clients buy and hold shares to build their best eggs.
That may be true. Nonetheless…
Robinhood's GameStop days
We're pretty sure Warren Buffett didn't jump onto the GameStop GameStop Corp. (NYSE: GME) craze.
Now, you probably haven't read much about GameStop lately. That's because the share price of the US-based video game and consumer electronics retailer has returned to some normalcy over the past 30 days. (It's down about 15%.)
A very different story from the early months of 2021, when frenzied retail traders drove shares 708% higher in only 6 days, from 21–27 January.
Indeed, fortunes were made by some and lost by others who jumped onto the GameStop bandwagon. Often in a matter of days. On the losing side, anyone who bought shares on 29 January would have been looking at a paper loss of 72% by 2 February. Ouch!
Facing regulatory pressure and citing "recent volatility" Robinhood opted to freeze all buying in GameStop on its platform on 28 January. GameStop shareholders could still use Robinhood to sell their shares.
The online trading app also froze trading in other Reddit army fuelled shares, including AMC Entertainment Holdings Inc (NYSE: AMC).
The next day, Robinhood ceded to angry users by allowing limited trading in shares like GameStop. However, it maintained restrictions on the number of shares users could trade on any given day, as well as banning fractional shares.
Warren Buffett, we imagine, is unlikely to be impressed.
