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Sanctuary Wealth's Jeff Kilburg on Robinhood: It's a flawed business model - YouTube
Channel: CNBC Television
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renaissance ipo etf while it's down 50
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from the highs is up 17 over the past
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month take a look at a firm robin hood
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that was our mystery chart warby parker
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unity software they're all down more
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than 70 percent from the all-time highs
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but they've also climbed at least 30
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percent over the past four weeks so
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should you chase them or not let's ask
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jeff kilburg he's sanctuary wealth cio
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and a cnbc contributor jeff it's good to
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have you and we'll just kind of walk
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through these one by one let's start
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with the firm which is up 71 over the
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past month
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no doubt kelly it's amazing to see a
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firm i'm actually a user of a firm
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because they work with peloton and
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peloton holds a lot of my dry cleaning i
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don't really use the pellet town but a
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firm at the end of the day has taken
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just a dramatic haircut kelly it was a
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47 billion valuation now it's down to 11
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billion but you're right you are seeing
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a little bit of investor gravitation
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here this ipo is at 49 so when you talk
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about
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the ability for this modern layaway this
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is truly the modern layaway you can buy
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now and pay it later so that's what a
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firm has to do so i think they're
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getting exciting their ceo talked about
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the fact when we actually do see a
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recession whatever year that recession
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may come kelly you'll see the value of a
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firm as it really is this modern-day
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version of layaway so this is a buy for
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you i should note three of these are buy
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for you one is a cell so you are
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constructive on some of these ipos that
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i think a lot of people have kind of
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lumped out as a category
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yes and kelly i'd be clear this is a
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trade this is a trade opportunity this
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is not a long-term investment but some
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of these names as they're so beaten up
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there is opportunity for that longer
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term hold so this trade is a little bit
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longer term in nature all right you like
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warby parker too it's up 36 over the
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past month i do and warby parker's
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interesting i'm actually a user i have a
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couple different glasses from them i
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really like the client experience they
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have a tremendous client experience but
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yes it's in oversold conditions but it
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does have a little bit of nervousness
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when you talk about the last messaging
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from their ceo was that they're very
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concerned and about the uncertain macro
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environment obviously that's shared
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across the s p 500 but i think there's
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an opportunity to buy warby parker so
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yes this is a buy as well kelly all
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right a firm and warby what about unity
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software this one's a little bit more of
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a contentious stock there are headlines
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now about them rejecting app 11's buyout
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offer the shares are down about seven
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percent today why do you like it
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you know unity is really interesting
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ticker u this is actually two dollars
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above its ipo it's up about 40 47 the
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last month but to your point kelly it's
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still down 61
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and i would preface that that unity
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feels like my wife as well as you kelly
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the prettiest girl in the room right now
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so they're getting all kinds of offers
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they had to reject the recent proposal
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from app lovin and this is all in the
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wake of the apple privacy issues so i
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think you have to consider yes the
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52-week high is 210 dollars yes we're a
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long way away from that but this is a
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really interesting story as we're really
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trying to navigate and understand the
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metaverse this is actually a great point
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that you saw facebook warn in the wake
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of those apple privacy issue changes
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they weren't about 10 billion coming out
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of their bottom line and absolutely
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happened so i think unity is actually
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really positioned quite well if you use
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the analogy about building a house you
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need unity and it's not just gaming here
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kelly this is uh there's a creative
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content play and now that they're really
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going to take an iron source that 4.4
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billion dollar merger that they're
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already playing on i think there's a
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potential for a bigger piece of the
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puzzle down the road and remember unity
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is actually bigger than app 11 from a
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market cap perspective so i want to be a
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buyer here and i think this is a much
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longer hold as we really figure out what
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this metaverse actually shakes out for
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the rest of 2022 as well as 2023. it's a
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helpful explanation because it's one of
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those companies i watch going i know
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they're up to something you know i mean
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can't quite always figure out what it is
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um but unity is a buy for you so let's
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move on to the name you're not as
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attracted to here which is robinhood i
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mean this was a terrible 2021 terrible
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start to the first year it has found
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some traction lately though why are you
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staying away
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kelly when i first came on cnbc talking
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about this ipo for robin hood i was a
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seller then it's a flawed business model
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80 of their revenue is predicated on
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them selling their order flow so i know
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it's commission free i know it doesn't
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cost anything to trade on it but the
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fact of the matter that they have an 80
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model
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predicated on collecting order flow
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monies i think that goes away the sec is
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trying to crack down that to a certain
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extent be more considerate but i think
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when you talk about
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robin hood the lack of profitability
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look at bank of america they said
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they're not going to be profitable until
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2025 so i didn't like it at the ipo for
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39
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i'm surprised it's actually in double
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digits right now i want to stay away
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from rob hood sell sell sell i guess to
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put it differently even if you thought
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that business model could stay intact
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they're still not making money on it
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you know that's a great point maybe i
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don't like that business model that's
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more of a personal view you're
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absolutely right but i think the
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longevity and the efficacy of that model
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they're not diversified if they got more
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diversified i could change my mind but
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right here right now being 80 leaning
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upon revenue all off of order flow
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selling it doesn't work and it doesn't
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add up to me kelly that's why they call
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you the killer jeff thanks so much good
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to see you today jeff kilburg
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shepard smith here thanks for watching
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cnbc on youtube
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