The Berkshire Hathaway annual shareholder meeting in Omaha usually contains interesting remarks from Warren Buffett and his longtime right-hand man, vice chairman Charlie Munger. The first in-person edition since the pandemic didn’t disappoint.
Speaking on Saturday in Nebraska, Munger called the company’s business model “disgusting,” and said it wasn’t surprising the company was now “unraveling,” according to CNBC.
The digital investing platform exploded in popularity during the pandemic, notably during the “meme-stock” craze of early 2021 when a new crop of day traders piled into obscure stocks with the click of a button, but it has struggled to maintain its momentum since going public in July of that year.
Last week, the company announced it was dismissing 9% of its full-time staff while reporting a wider-than-expected loss and revenue downturn for the first quarter of 2022. Robinhood shares are currently down more than 80% from their August 2021 high.
“Our larger customers are still remaining active, but we are seeing more pronounced declines from those that have lower balances,” CEO Vlad Tenev said on a conference call reported by Bloomberg, in an apparent reference to the platform’s many day-trading customers.
Criticisms of a casino mentality
At last year’s annual meeting, Berkshire Hathaway Warren Buffett likened the company to a casino, and said Robinhood “set out to attract” people who are gambling on short-term price movements in stocks, instead of long term investors reading the markets, according to Reuters.
The company has a history of attracting scrutiny over its alleged ‘gamification’ of investing. In 2021, Robinhood was accused by lawmakers of creating an app that made investing into a video-game like atmosphere that turned decisions involving real money into a game for rookie investors.
On Saturday, Munger again invoked the casino comparison, criticizing the company’s “short-term gambling and big commissions and hidden kickbacks and so on.”
“It’s so easy to overdo a good idea. … Look what happened to Robinhood from its peak to its trough. Wasn’t that pretty obvious that something like that was going to happen?” Munger said, according to CNBC.
Robinhood responded to Munger’s comments Monday and accused the 98-year old billionaire of mischaracterizing the platform and its users.
“It is tiresome witnessing Mr. Munger mischaracterize a platform and customer base he knows nothing about,” said Jacqueline Ortiz Ramsay, Robinhood’s head of public policy communications, in a statement to Fortune. “He should just say what he really means: unless you look, think, and act like him, you cannot and should not be an investor.”
Representatives of Berkshire Hathaway and Munger did not immediately respond to Fortune’s request for comment.
This story was originally featured on Fortune.com