Finimize - 📉 Robinhood goes from bad to worse

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Today's big stories

PayPal’s trying to tap into a younger market
The harder life gets for the euro, the better this trade stands to perform – Read Now
BMW warned that sales are going to slow down sooner than investors thought

Young At Heart

What’s Going On Here?

PayPal posted strong quarterly results earlier this week.

What Does This Mean?

PayPal’s been struggling in the last few months, both as inflation has continued to drag on online spending and as eBay has moved payments away from the platform. So the company has now shifted its focus from adding users to getting existing ones to use its platform more often. It made progress on that front last quarter: the average number of transactions per active account jumped 12%, which helped overall revenue climb by a better-than-expected 9%. And there was plenty more good news: PayPal upped its full-year profit outlook, announced a new $15 billion share buyback program, and saw its stock surge 13% after activist investor Elliott Management revealed it had become one of the company’s biggest shareholders.

Why Should I Care?

The bigger picture: PayPal wants the Gen Z dollar.
PayPal’s next big priority is to reduce costs, and it’s hoping that certain measures – like hiring in low-cost regions – will save it about $900 million this year and $1.3 billion next. But it is still planning to invest in payment app Venmo: PayPal wants to improve the way it works alongside its flagship platform, as well as make the app available to teenagers in a bid to boost user numbers.

Zooming out: Robinhood’s not-so-merry men.
PayPal said last year that it was thinking about adding stock trading capabilities to its app, but cost-cutting measures have seen it abandon the push. That might be a smart move: Robinhood just posted another decline in both users and user investments last quarter, sending its revenue down 44% from the same time last year. Things are so bad, in fact, that the darling of the pandemic trading boom said it’s going to be cutting nearly a quarter of its workforce.

You might also like: How Robinhood makes you lose money.

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Analyst Take

How To Profit From A Euro-Based “Carry Trade”

Reda Farran, Analyst

It’s been a tough year for the euro, which has fallen to parity with the US dollar amid a dicey backdrop for Europe.

But this situation has also boosted the potential of one trade that’s both shown big gains – as much as 29% this year – and low correlation with traditional asset classes.

In fact, the harder life gets for the euro, the better this “carry trade” stands to perform.

So that’s today’s Insight: how it works exactly, and how you can replicate it yourself.

Read or listen to the Insight here

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