Robinhood Financial blasted Berkshire Hathaway chairman Warren Buffett and vice chairman Charlie Munger on Monday after the industry titans criticized the online investment platform.
Speaking on Saturday to Berkshire Hathaway investors, Buffett compared the popular but polarizing Robinhood app to a casino and raised questions about its societal benefits. Munger went even further, calling Robinhood “god awful,” “deeply wrong,” and implying it “[made] money selling things that are bad for people.”
In a Monday blog post, Robinhood panned “the old guard of investing” and argued that Buffet and Munger’s criticism was driven by a fear of innovation compromising their grip on the market.
“If the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing,” wrote Jacqueline Ortiz Ramsey, head of public policy communications for Robinhood.
“We’re not going to sit back while they disparage everyday people for taking control of their financial lives,” she added.
Robinhood has exploded in popularity amid a rush of new investors into the stock market, particularly among younger, amateur traders. While some praise Robinhood for expanding access to financial markets, others have expressed concerns that it lacks sufficient safeguards and fuels overly speculative trading, particularly for “meme” stocks, cryptocurrency and derivatives.
Buffett and Munger, long considered two of the most successful modern investors, are among several Wall Street veterans who’ve ripped Robinhood and the way it has influenced markets.
“The gambling impulse is very strong in people worldwide and occasionally it gets an enormous shove,” Buffett said Saturday.
“It creates its own reality for a while, and nobody tells you when the clock is going to strike 12 and it all turns to pumpkins and mice,” he said.
Ramsey responded that Buffet and Munger only “insulted” Robinhood because “we are doing things a new way” and making “investing simpler and more accessible to more people.”
“Suddenly, 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. But change is bullish. When she comes, no one can stop her,” Ramsey wrote.