Investors angered by Robinhood's decision to block them from buying shares of GameStop (NYSE:GME) fled the online brokerage app, and Mizuho (NYSE:MFG) analyst Dan Dolev says Square (NYSE:SQ) was the beneficiary.
Dolev says a survey of 80 Robinhood traders who abandoned the popular investing platform for another service showed nearly 40% switched to Square's Cash App. The service is a mobile payment platform that allows users to transfer money to one another, as well as invest in stocks and bitcoin.
As GameStop's stock rocketed to record territory driven by Reddit users attempting to inflict maximum pain on short-sellers, Robinhood and other brokerages, both online and off, put the brakes on buying the video game retailer's stocks and options contracts. Investors were only allowed to sell their shares.
Although most brokerages rescinded the ban by the next day, the halt in trading caused GameStop's stock to plummet. It also angered traders who felt Robinhood and other brokerages had stepped in to help the hedge funds and market makers from losing any more money, something they wouldn't do for retail investors.
Dolev says other trading platforms also saw an influx of new customers as a result, including Fidelity, Stash, and TD Ameritrade, though Cash App was the favorite.
He also says that one-third of the respondents were net new customers for Square, but also points out Robinhood might not suffer any long-term repercussions since 50% of those leaving the app said they would consider returning.
Square remains a buy recommendation for Dolev, with a $300 per share price target, some 40% above where the fintech stock trades today.