Twitter Thread
1/10 The "Great Wealth Transfer" is a $84 Trillion opportunity. But the winner won't be a bank. And it won't be a gambling app.
It will be the "Financial Operating System."
Here is the Institutional Deep Dive on @Wealthfront ($WLTH) and why it's the most important IPO of 2025. 🧵👇
2/10 The Problem: Traditional finance was built for Boomers.
- High fees (1%)
- Phone calls
- Paper forms
Digital Natives (Millennials/Gen Z) hate this. They want "Self-Driving Money." They want to set it and forget it.
3/10 Enter Wealthfront. They aren't just a "Robo-Advisor." That's a 2015 term. They are an Automation Platform.
Direct Deposit -> Bills -> Emergency Fund -> Investments. All automated. No human intervention.
4/10 The "Wedge" Strategy: How do you acquire customers when ads are expensive? You give them free money.
Wealthfront led the "Yield War," offering 5.0% APY on cash when banks offered 0.01%. Result: Billions in deposits. CAC < $200.
5/10 The Moat: Tax-Loss Harvesting (TLH). Most people ignore taxes. Wealthfront automates them. Their software harvests losses daily to offset gains.
For many users, the "Tax Alpha" covers the 0.25% fee entirely. The service is effectively free.
6/10 Direct Indexing. For accounts >$100k, they stop buying ETFs and start buying individual stocks (S&P 500). Why? So they can harvest losses on individual losers, even when the index is up. This is "High Net Worth" tech brought to the masses.
7/10 The Valuation. We value WLTH as a hybrid:
- Advisory (SaaS-like recurring rev)
- Banking (NIM-based rev)
Our SOTP Model: Advisory: $3.6B Banking: $2.7B Tech Premium: $0.6B Total: $6.9 Billion.
8/10 The Risks.
- Interest Rates: If the Fed cuts to 0%, the Banking revenue drops.
- Competition: Robinhood is hungry. Schwab is massive. But Wealthfront has the "Trust" lead (NPS 72 vs HOOD 28).
9/10 The Verdict: Wealthfront is the only scalable, pure-play bet on the automated wealth thesis. It's profitable. It's growing. It's sticky.
We initiate with a BUY rating and a $50 price target.
10/10 Read the full 60-page report and access the valuation model here: [Link]
And follow @InvestmentPrimer for more deep dives. #Fintech #Wealthfront #IPO #Investing