Cramer says Robinhood is a buyout even after its rocky IPO

CNBC’s Jim Cramer said Monday that he believes Robinhood shares can be acquired at their current levels, suggesting that brokerage has a bright future that responds to the financial preferences of younger people.

When Robinhood branches into other forms of finance, including cards ‘buy now, pay later’, I think [CEO Vlad Tenev’s] exercise of 22 million users will grow and become more powerful, ”said host“ Mad Money ”.

“That’s why I tell you that Robinhood can be acquired here,” Cramer added. “If Square can raise 10% on this Afterpay deal, imagine what Robinhood could do if they bought someone else in the industry – think Affirm. The stock will increase.”

Square shares grew a day after the fintech company behind the Cash App announced a $ 29 billion deal in all shares to buy Afterpay, an Australian company that offers “buy now, pay later” services “.

While gains of this magnitude are unusual after a company unveils plans to execute an acquisition of all stocks, Cramer said it reflects the confidence investors have in Square’s growth, particularly around services such as and “buy now, pay later” which are popular among millennials and Gen Z.

In addition to Square, Cramer said PayPal – which owns the peer-to-peer payment app Venmo, a rival to the Cash App – is another financial services company that has been tested by the younger generations.

“I think Robinhood could be next,” said Cramer, whose company, which pioneered free-commission stock trading, is expanding into other areas. Robinhood already offers cash management accounts, and Tenev told CNBC last week that he hopes in five years that the company will be “the most trusted and culturally relevant money app in the world.”

While Robinhood’s initial public offering last week was seen as a disappointment, Cramer said the company’s long-term history remains promising. That’s because “companies that target young people have as little value as investments,” said Cramer, who argues that it also applies to the actions of the fast-track casual chain Chipotle, the manufacturer of streaming devices Roku is the DoorDash food delivery application.

“This scarcity value has allowed him to grow stronger at a tremendous rate,” and he wishes Robinhood well, he said.

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