GZV #51: A Membership-based Brokerage?
Only $4.99 a month?
Good morning everybody.
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Let me introduce you to Tornado.
Problem:
Financial wellness for everyday people has been difficult to accomplish in the past.
Solution:
Tornado's unique model “encourages more responsible and sustainable investing”.
The Unique Model
Different from traditional models Tornado is a membership-based platform that charges $4.99/month and includes 25 free trades per month. After that trades cost $4.50.
I view this as a good way to restrict day trading and help people invest more for the long term.
Gen Z View:
I’ve often believed there is a gap between the Robinhood’s of the world and the Fidelity’s of the world. We need something in the middle that encourages sound and smart investing, and as most of us know, long term investing is the most sound type of investing there is.
Gen Z needs a transition from the WSB culture we are surrounded by in college, toward the type of investor our parents does. Tornado seems like a place that support and nourishes this transition.
The 25 free trades per month is perfect to discourage day trading which has historically been an unsafe way of investing.
Fundraising?
Just received $10m from A-Rod, Marc Lore, and Dave Portnoy.
Website:
Square Completes The Flywheel
I had been hearing rumors that something like this was going to come to fruition for the past 2 months. It just made sense from the perspective of Square’s business model. It simply completes the flywheel for this arm of Square.
I remember last year when I saw Square at $80 and considered buying but didn’t. You can say I missed one. When this news broke Tuesday though, I did not hesitate in buying multiple shares of Square. I believe it is a similar situation to Shopify. Seeing the stock when it was at $300 was hard to muscle buying, but now past $1000, it seems a lot easier looking back.
The future of the fintech space eventually ends in one place; replacing most of the modern banking system. Square is leading this effort by a large margin. Companies like HMBradley, Blockfi, and multiple others are helping this movement, but I really like Square as a public market investment.
Square’s biggest stamp recently has been their POS systems and Cash App dominance. Even with Venmo miles ahead, Cash App quickly caught up and surpassed the once dominate peer to peer payment platform. Cash app has even added on an investing feature for users. In term’s of POS systems, Square seems right up there with the most popular systems for SMB’s. I will say from a Gen Z perspective, they are much better customer experience than other systems.
That’s all. Buy Square. They completed the flywheel.
*not financial advice*
Tom
Disclaimer: Tom Lombardozzi does hold shares in SQ. None of the opinions written or expressed in this newsletter reflect the opinions of Tom Lombardozzi’s employer(s) nor should be consider as financial advice.