Robinhood CEO Vlad Tenev says eyeing expansion beyond tradingFinance | 30 Jul 2021 7:16 am
Robinhood has already changed how people trade stocks and who’s doing it. Now its sights are on the rest of the financial industry.
Shares of Robinhood Markets traded for the first time on the Nasdaq Thursday, following the highly anticipated initial offering by the company that’s drawn a new generation of investors into the market and forced the industry to stop charging fees for trading. Shares swung sharply through the day before ending with an 8.4 percent drop.
But while the IPO is a milestone, it’s not a culmination, according to Chief Executive Vlad Tenev.
In an interview with The Associated Press, Tenev said he wants Robinhood to be the only app that people use on their phones for money. That covers everything from depositing paychecks to paying bills to splitting payments with friends.
Tenev, who founded Robinhood with fellow Stanford graduate Baiju Bhatt in 2013, also said he accepts how his company has become synonymous with the boom in trading by smaller-pocketed and novice investors, for both good and ill. Such investors are getting their first chance to grow their wealth, after years of falling further behind stock-owning households, but they also have been criticized for making too many risky trades with their newfound app.
Early this year, they almost singlehandedly sent GameStop and a group of other “meme stocks” to heights professional investors called dangerously irrational. The mania led to big losses for some hedge funds, multiple halts in trading for stocks and congressional hearings asking who was getting hurt. It also forced Robinhood to temporarily bar its customers from making some GameStop trades, after it suddenly had to post much more in collateral to its clearinghouses that process its trades.
Critics say the company based in Menlo Park, California, encourages unsophisticated investors to make dangerous bets by making it seem too much like a game. But Tenev said he wants his app to encourage everyone to profit from the stock market, not just the elite. This interview has been edited for clarity and for length.
Q: This year started off rocky for Robinhood with the GameStop saga. Is the IPO a sign the company has turned the corner?
A: I think it’s an amazing milestone, and it’s really a celebration of the individual investor. Individual investors have undoubtedly seen a resurgence over the past few years, and Robinhood has been part of that story. We think there’s a lot more we can still do to serve the individual investor.