Famed ‘Big Short’ investor Steve Eisman has weighed in on the struggles facing fintech and crypto-exposed platforms, explicitly favoring Charles Schwab Corp. (NYSE:SCHW) over Robinhood Markets Inc. (NASDAQ:HOOD).
The Crypto Headwind
Eisman highlighted Robinhood’s lofty valuation and its significant exposure to the volatile cryptocurrency market, warning that the company has “no margin for error” given its current trajectory.
Speaking in his weekly market commentary, Eisman underscored the renewed “decline” in crypto prices as a major factor hurting platforms like Robinhood and Coinbase Global Inc. (NASDAQ:COIN).
He noted that a “not insignificant portion” of Robinhood’s customers invest in crypto, and this slump is directly impacting its performance. The company recently missed on earnings, revenue, and net new assets – all critical metrics.
Eisman bluntly stated, “I doubt Robinhood will go up until at least crypto stabilizes.”
Valuation Disparity
A key point of contention for Eisman is Robinhood’s valuation compared to its established competitors.
He …