- AP SAN FRANCISCO — GameStop and other meme stocks are trending upward once again, bringing back memories of the early 2021 bubble that burst out and burned many investors in addition to Robinhood Markets. The meme stock bubble was fueled by the online stockbroker, which was particularly well-liked by younger generations. Eventually, it got so overloaded that it abruptly stopped accepting trades. Many clients were incensed by the action, accusing the brokerage of causing their losses. This led to legislative inquiry and litigation.
- Tenev, 37, recently spoke on the progress of Robinhood and the difficulties of managing a publicly traded business whose stock price has dropped almost 40% from its $38 IPO price in July 2021. Additionally, he downplayed the possibility of a federal regulatory probe into Robinhood’s cryptocurrency division, which is now growing after acquiring Bitstamp for $200 million.
What is your opinion of the current investment climate in comparison to a few years ago?
- A: In 2021, I had some anxiety. We were expanding so rapidly that I didn’t believe our infrastructure could support it, and we were devoting so much of our resources to keeping up with our growth that we weren’t able to develop new products that would be our next main sources of growth. Now that the foundation is considerably stronger. This is evident in the current meme stock craze. We are not only dependable and up, but we are also one of the few locations where you may exchange these items around the clock. That makes a significant difference.
Have you and the business both become smarter?
- A: We’ve picked up a ton of knowledge. The first thing I learnt was that infrastructure problems shouldn’t cause you to collapse. That’s a difficult lesson to learn, but we are doing rather well today since we have made many investments. The second lesson is to take considerably more initiative in responding to events. I have spent a lot more time on social media. The ability to communicate is, in my opinion, much more evolved.
Are you attempting to educate your consumers about money matters?
- A: The first is just educating people about things like the time in 2022 when we made headlines due to individuals purchasing insolvent stocks via Robinhood. As it turned out, it was a wise trade-off for those who ended up making a lot of money doing that. However, we don’t want anybody trading it without being aware of its bankruptcy. Thus, we made several additions to the goods, such as the warning that “This company has declared bankruptcy, so watch out.” It’s contextual material that enables individuals to ensure that they are informed; I’m not sure whether it qualifies as education.
- A: In the United States, we have 24 million consumers who have money in their accounts. The majority are millennials and Gen Z with earnings of $100,000 or more; there are a few Gen Xers among them. Many of them are now parents, many of them are wealthy, and most of them have a penchant for sports, business, and entrepreneurship. Because of our high-yield savings offering and other innovative products, we have also attracted elderly clientele. We have also been making a lot of offers to transfer your current taxable and retirement accounts to Robinhood. The idea of Robinhood is to democratize something that is exclusively owned by the affluent and then make it available to everyone.
- What about the Securities and Exchange Commission’s recent notification to Robinhood that it would face penalties for purported infractions related to its Bitcoin operations?
- A: I firmly believe that the regulations have gone too far. Regulation via enforcement is taking place. Our plan, which we worked on with the SEC, was to establish a special-purpose dealer just for the trading of cryptocurrency assets. After sixteen meetings, we just received an email from them stating, “We don’t see a point in meeting anymore.” And so, here we are.
- How has it been to go from being the CEO of a privately held firm to being the founder and leader of a startup?
- A: Undoubtedly, that was a teaching moment. We have had to make several difficult and unpleasant adjustments to the company. A few of my earnings calls weren’t enjoyable. In the end, we accomplished several excellent things that, in retrospect, we may not have done if we had been private, which strengthened our business. Both as an executive and a person, it has improved me. For sure, I wouldn’t take anything back.
Source:
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