Berkshire Hathaway Vice Chairman Charlie Munger did some kicking of a downed dog on Saturday.
“Wasn’t that pretty obvious that something like that was going to happen?” Munger said during the Berkshire Hathaway annual shareholders meeting after bringing up Robinhood’s business troubles, later adding the company’s business model “was disgusting… God is getting just. … There’s been some justice.”
A spokesperson for Robinhood didn’t immediately return Yahoo Finance’s request for comment.
Munger has been an outspoken critic of the investing platform, which makes most of its money through payment-for-order flow — that is, selling customer market orders to third parties.
“When you pay for order flow, you’re probably charging your customers more in pretending to be free,” Munger said in February 2021, at the height of the meme stock frenzy and a few months prior to Robinhood’s July 2021 IPO. “It’s a really dishonorable, low-grade way to talk, and nobody should believe Robinhood’s trades are free.”
Robinhood stock is down nearly 45% so far in 2022, and shares are down 72% since the company hit public markets.
At last year’s Berkshire shareholders meeting, the billionaire stated: “It’s just god awful that something like that would draw investment from civilized men and decent citizens. It’s deeply wrong. We don’t wanna make our money selling things that are bad for people.”
Munger’s latest comments come on the heels of a brutal week for the retail investor trading platform.
Robinhood announced that the company would slash 9% of its workforce in an effort to reach profitability by the end of the year. The company then reported a very lackluster first quarter, pressured by waning trading volumes for stocks and cryptocurrencies.
The company lost $143 million on an adjusted operating profit basis, compared to a $115 million profit a year earlier, and first quarter sales nosedived 43% from a year ago. Options based trading sales also fell 36% while cryptocurrencies dropped by 39% and equities plunged 73%.
“We all know this is a challenging time in the markets,” Robinhood co-founder and CEO Vlad Tenev told analysts on an earnings call. “And our focus during this time is on building a great company for the long term.”
Berkshire Hathaway Chairman and CEO Warren Buffett, Munger’s longtime business partner, attempted to lighten the mood slightly amid Munger’s comments.
“Is it wise to criticize people at all?” Buffett asked.
“Probably not,” Munger quipped, “but I can’t help it.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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Source: finance.yahoo.com