{Updated on July 4, 2020 with a new offer link!}
Robinhood – the easy-to-use, zero-commission trading platform popular with Millennials and stock market beginners – went from a valuation of $1.3B in March, 2017 to $5.6B in May, 2018 partially thanks to a major funding round that brought another $363M to the company’s coffers. Robinhood is clearly spending some of that money to get market share as it gives away free stock as part of its promotions for new accounts. Here are the simple instructions for getting your share of the pot.
I finally signed up for Robinhood in March just ahead of the coronavirus-driven market collapse. I received one share of GameStop (GME) for my efforts.
Source: TradingView.com
You too can get free stock for signing up with Robinhood. After clicking my referral link you will be taken to a landing page that looks something like the following:
IMPORTANT: After clicking on “Claim your free stock now,” Robinhood gives you just 24 hours to make up your mind. So be ready BEFORE you click!
Robinhood gamified the stock selection process. New registrants choose from three cards or panels and then “rub” off the emblem to reveal their free stock. Robinhood is making the allocation decision for the stock, but this process gives new registrants the (simulated) experience of choosing their free stock. Only a small fraction of new account registrants will score significant value from this promotion. Robinhood has set up a kind of lottery with the following odds:
“There is an approximately 98% chance of the stock bonus having a value of $2.50-$10, an approximately 1% chance of the stock bonus having a value of $10-$50, and an approximately 1% chance of the stock bonus having a value of $50-$200, based on the price of shares at the time of purchase. The Robinhood platform displays approximate odds of receiving shares from particular companies at the time the screen is generated. These odds do not necessarily reflect the odds of receiving stock in those companies at the time the stock bonus is awarded.”
In other words, the odds strongly favor getting awarded a drop in the bucket. But, hey, it is better than nothing, right? Also note that once you open an account, you can earn additional free stock by referring others to Robinhood. So if you are good at networking you can start to accumulate a small portfolio.
Robinhood also has an interesting process for securing the free stock for your new account:
“The stock bonus is one share selected randomly, when the bonus criteria are met, from Robinhood’s inventory of settled shares held for this program. When shares are purchased into this inventory, Robinhood purchases shares from the three to four companies representing the highest market capitalization in various ranges of share prices between approximately $3 and $175, limited to those companies that are widely held among Robinhood accounts.”
You may be wondering why Robinhood would limit the stock inventory to those stocks held in existing accounts. I suspect this restriction is a function of Robinhood’s system of creating its inventory of stock to enable commission-free trading.
After you take advantage of this offer, I would love to hear about your Robinhood experience. If you would like some trading ideas, subscribe to this blog or check in from time-to-time. I also post on StockTwits and Twitter as @DrDuru.
Much success to you and be careful out there!
Be careful out there!
Full disclosure: long GME