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.
Shares of Robinhood Markets are set to begin trading on the Nasdaq Thursday, a 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. But while the IPO is a milestone, it’s not a culmination, according to CEO 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. 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.
More AP Business newsForgotten oil and gas wells linger, leaking toxic chemicalsRobinhood makes its $32 billion debut on Wall Street Robinhood CEO tells AP it’s eyeing expansion beyond tradingUS economy surpasses pre-pandemic size with 6.5% Q2 growthOnce fading, mask sales starting to rebound Robinhood makes its $32 billion debut on Wall Street Robinhood CEO tells AP it’s eyeing expansion beyond tradingUS economy surpasses pre-pandemic size with 6.5% Q2 growthOnce fading, mask sales starting to rebound Robinhood makes its $32 billion debut on Wall Street Robinhood CEO tells AP it’s eyeing expansion beyond tradingUS economy surpasses pre-pandemic size with 6.5% Q2 growthOnce fading, mask sales starting to rebound Q: Your app makes it fun and easy to trade, but that’s something you get criticism for, both on Wall Street and from regulators. Is that criticism justified? A: I don’t think so. We accept that there’s always things that we could be doing better, and we’re investing a lot in making sure that customers are educated. Ultimately, though, more access is better. And the stock market in particular has been a great source of wealth creation for so many people. It’s been reserved for the 1% for a very long time. So we’re proud to give access and to make it easier for people to use.
Q: Why is Robinhood the lightning rod for so much criticism? A: Well, I think that Robinhood has become synonymous with retail investing and the individual investor in America, and with that comes good things and the downsides of it as well. You hear “Robinhood investors,” and that’s kind of become the new term for retail investors. So I think it’s a positive thing, that helps get the brand out there. But whenever there’s criticism for the industry, since we represent it, we to some degree have to answer to it. Q: When you look at your customers, do you think they see it as entertainment at all?
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