Robinhood CEO says AP that the company is looking beyond trading to expand its business

Robinhood already has a profound impact on how stock traders trade and who is doing it. It now wants to expand its reach into the rest of financial services.

Robinhood CEO says AP that the company is looking beyond trading to expand its business

Robinhood already has a profound impact on how stock traders trade and who is doing it. It now wants to expand its reach into the rest of financial services.

TheEditor
TheEditor
29 July 2021 Thursday 12:26
255 Reads
Robinhood CEO says AP that the company is looking beyond trading to expand its business

Robinhood Markets shares will trade on the Nasdaq starting Thursday. This highly anticipated initial offering has attracted a new generation to the market and forced the industry not to charge trading fees. Vlad Tenev, CEO, said that while the IPO is a significant milestone, it is not the end of the story.

Tenev stated that Robinhood should be the only money app people use, in an interview with The Associated Press. This includes everything, from splitting bills with friends to depositing paychecks to paying your bills to paying your bills.

Tenev, a Stanford graduate, founded Robinhood in 2013 with Baiju Bhatt. He also stated that he accepted the fact that Robinhood has become synonymous for small- and novice investor trading booms, both good and bad. After years of being further behind stock-owning households, these investors now have a chance to grow their wealth. However, they are also criticised for taking too many risks with their app.

They almost sent GameStop and other meme stocks to heights that professional investors considered dangerously insane in early 2015. Some hedge funds suffered huge losses, there were multiple halts to stock trading and congress held hearings about who was hurt. Robinhood was forced to temporarily stop customers from making GameStop trades after it had to pay more collateral to the clearinghouses that processed its trades.

Critics claim that the Menlo Park-based company encourages untrained investors to place dangerous bets, making it appear too much like a game. Tenev stated that he wanted his app to be accessible to everyone and not just the wealthy. This interview was edited for clarity, length and clarity.

Q: With the GameStop scandal, this year began rocky for Robinhood. Is the IPO a sign that the company is on the right track?

A: It's an incredible milestone and it's a celebration for the individual investor. Robinhood is a part of the story that individual investors have seen a rise in popularity over the last few years. We believe there is more we can do for individual investors.

Q: While your app makes trading fun and easy, regulators and Wall Street criticize you for it. Is this criticism justified?

A: No, I don't believe so. We recognize that there are always areas that could be improved and that education is a major part of our business. However, access is always better. The stock market has been a major source of wealth creation for many people. For a long time, it was reserved only for the 1%. We are proud to offer access and make it more accessible for everyone.

Q: What is it that Robinhood is so critical of?

A: Robinhood is synonymous with retail investing in America and individual investors. There are both good and bad things about Robinhood. "Robinhood investors" is the new term for retail investors. It's a positive thing that the brand is out there, and I believe it's a good thing. We are responsible for any criticisms made about the industry.

Q: Do you think your customers see it as entertainment?

A: I believe that it is important for our customers enjoy using our products. If you don't enjoy investing, then you will do less. We want our products to be easy to use. However, it's important that people are educated and informed. We have been making investments to ensure that our products are safe, and that we offer all the tools and information that our customers require to succeed.

Q: People believed that GameStop was the Robinhood Gang taking over Wall Street. Is it bothersome that you use this term?

A: It doesn't matter if it's being used in a negative way. You can see that many of these customers are building portfolios and buying and accumulating stocks. It seems that many people are engaging long-term, beneficial behaviors. It is unfair to say that a large number of people are being painted with the same brush as a small number of people.

Q: What are your thoughts on Robinhood making the stock market a gambling place?

A: It's a huge mischaracterization. The stock market is one of the most powerful wealth-creating tools. It is important to encourage access and not denigrate those who are able to use it. In a sense, investing is when wealthy customers engage in the stock market. It's gambling when we can access the stock market. That rhetoric has to stop, I believe.

Q: One in every 20 Robinhood transactions at the beginning of the year was made with dogecoin. What is the importance of Bitcoin and other cryptocurrency in the long-term strategy for your business?

A: This is definitely an area that we are interested in. According to many people, it is in many ways the future for the financial industry. We want to ensure that we are there and that our customers get the best possible service when they explore this new asset class. Crypto has been culturally relevant for the first six months.

Q: What will Robinhood look and feel like in the future.

A: We want to become the number one money app, culturally relevant and trusted, worldwide. Robinhood should allow you to do everything you want with your money.

Robinhood is a great place to deposit your paychecks. We want customers to use Robinhood for their emergency fund, bill payments, and day-to-day spending. We also offer all types of investment, from long-term retirement savings to more discretionary investing.

Q: You may have a net worth of more than $2B after the IPO. Is there a social cause that you are interested in championing?

Q: I haven’t begun to think too much about my future post-IPO. I have been very focused on the company and its mission. We'll see. Robinhood's mission is something I strongly believe in. We believe strongly in financial empowerment and inclusion for everyone.

Q: You don't plan to purchase a ticket to the International Space Station? I was told Venus was your favorite planet.

A: It turns out that it is not a very welcoming planet. I enjoy all planets. Earth is also pretty great, so I'm happy to stay here for the moment.

Comments

Warning!

You have to login for comment. If you are not a member? Register now.

Login Sign Up