What does Robinhood want to be when it grows up?

Unlock Editor’s Digest for free

FT editor Roula Khalaf selects her favorite stories in this weekly newsletter.

Robinhood used to be the go-to broker for renegade first-time investors who wanted to stay on Wall Street. Three years after the height of the meme stock craze, the company wants to reclaim its disruptor crown. This is a much more interesting investment story, especially if it figures out where problem solving can best be implemented.

Three straight quarters of net profitability have helped Robinhood shares rise more than 50% this year. It was also helped by market tailwinds, particularly its crypto operations, as bitcoin trading surged. In fact, its actions closely followed the crypto drama. Higher interest rates also helped net interest income by offsetting a decline in revenue from discounts and order flow payments that make up its core trading business.

So far so simple. But how does founder Vlad Tenev want Robinhood to be viewed? The place where the kids trade Nvidia while mom and pop sort through their 401(k) retirement funds? A crypto hub with the air of an outlaw, but safe on land to US rules? Or a combination of the above in a super app that combines multiple businesses like payments and savings?

This year, Tenev has made moves that fit all three. In June, Robinhood bought cryptocurrency exchange Bitstamp — even as it faces an expected lawsuit over alleged violations of crypto-related securities laws. By the end of the year, customers will have a web platform that should increase its appeal beyond smartphone-obsessed youth. In July, it bought Pluto, an artificial intelligence-based research platform. Meanwhile, in March it launched a credit card as part of its “gold” subscription service. Bitstamp also gives it an inroad with institutional investors, potentially opening up an entirely different trading market.

Tenev said the credit card was “just the beginning.” It sounds like a superapp in the making, and those stories can get complicated fast.

Shares of Robinhood are trading at 27 times estimated earnings based on its simple growth story. This is a premium for brokering rivals. Interactive Brokers — which serves institutional traders as well as retail traders — and Charles Schwab, which owns a bank, trade at multiples of 18 and 17, respectively. Crypto exchange Coinbase, by contrast, is active at 37 times.

Next month in Miami, the broker is hosting its first client conference with promises of “amazing” new products. After three years of association with a short and ill-fated market mania, long-term investors should be looking for a clearer idea of ​​the next chapter in Robinhood’s story.

[email protected]