Many startup founders dream of the day their creation claims the top spot in Apple Inc.\u2019s app store. For Vlad Tenev, Robinhood Markets Inc.\u2019s chief executive, it was more like a nightmare.<\/p>\n
Mr. Tenev and his co-founder, Baiju Bhatt, had set out eight years earlier to bring the stock market to a new class of investors. With engineers plucked from Facebook Inc. and other tech giants, they stripped down the trading experience and eliminated commissions, making buying a share of stock about as easy as posting a photo on Instagram.<\/p>\n
It worked. During the pandemic, throngs of amateur investors\u2014homebound, bored and flush with stimulus checks\u2014opened Robinhood accounts to experience the market\u2019s thrills. By the end of December, the firm had amassed about 20 million users, according to people close to it, and weeks later its app hit the top of download charts.<\/p>\n
It should have been a moment to celebrate. Instead, Thursday of last week began with a panicked, predawn phone call informing Mr. Tenev that Robinhood needed to come up with billions of dollars if it wanted to open for business in a few hours.<\/p>\n
His day ended on prime-time television, with a CNN anchor asking Mr. Tenev if Robinhood was trying to \u201cstarve the little guy.\u201d Robinhood\u2019s breakout moment turned out to be the thing that nearly broke it.<\/p>\n
The firm that set out to bring investing to the masses had run into the reality of Wall Street, with its tangle of often-expensive regulations, overseers and Byzantine infrastructure. A tech company at heart, Robinhood at times failed to give priority to things like customer service, communications and risk management\u2014staid but essential tasks in the world of finance. It differed from most major brokerage firms in a critical way: It wasn\u2019t part of a well-funded financial colossus that had myriad sources of cash and sprawling compliance teams.<\/p>\n
Matters came to a head early on Jan. 28 when the clearinghouse that handles Robinhood\u2019s trades demanded it put up a total of $3 billion to cover the day\u2019s trading, a cushion for the risks created by a stunning run-up in a few stocks, such as GameStop Corp. GME 19.20% , fed by cheerleading on Reddit\u2019s WallStreetBets forum.<\/p>\n
The demand, 10 times Robinhood\u2019s daily requirements earlier that week, set in motion a chain of events that included stopping customers from buying the very stocks that made the app so popular.<\/p>\n
Many startup founders dream of the day their creation claims the top spot in Apple Inc.\u2019s app store. For Vlad Tenev, Robinhood Markets Inc.\u2019s chief executive, it was more like a nightmare.<\/p>\n
Mr. Tenev and his co-founder, Baiju Bhatt, had set out eight years earlier to bring the stock market to a new class of investors. With engineers plucked from Facebook Inc. and other tech giants, they stripped down the trading experience and eliminated commissions, making buying a share of stock about as easy as posting a photo on Instagram.<\/p>\n
It worked. During the pandemic, throngs of amateur investors\u2014homebound, bored and flush with stimulus checks\u2014opened Robinhood accounts to experience the market\u2019s thrills. By the end of December, the firm had amassed about 20 million users, according to people close to it, and weeks later its app hit the top of download charts.<\/p>\n
It should have been a moment to celebrate. Instead, Thursday of last week began with a panicked, predawn phone call informing Mr. Tenev that Robinhood needed to come up with billions of dollars if it wanted to open for business in a few hours.<\/p>\n
His day ended on prime-time television, with a CNN anchor asking Mr. Tenev if Robinhood was trying to \u201cstarve the little guy.\u201d Robinhood\u2019s breakout moment turned out to be the thing that nearly broke it.<\/p>\n
The firm that set out to bring investing to the masses had run into the reality of Wall Street, with its tangle of often-expensive regulations, overseers and Byzantine infrastructure. A tech company at heart, Robinhood at times failed to give priority to things like customer service, communications and risk management\u2014staid but essential tasks in the world of finance. It differed from most major brokerage firms in a critical way: It wasn\u2019t part of a well-funded financial colossus that had myriad sources of cash and sprawling compliance teams.<\/p>\n
Matters came to a head early on Jan. 28 when the clearinghouse that handles Robinhood\u2019s trades demanded it put up a total of $3 billion to cover the day\u2019s trading, a cushion for the risks created by a stunning run-up in a few stocks, such as GameStop Corp. GME 19.20% , fed by cheerleading on Reddit\u2019s WallStreetBets forum.<\/p>\n
The demand, 10 times Robinhood\u2019s daily requirements earlier that week, set in motion a chain of events that included stopping customers from buying the very stocks that made the app so popular.<\/p>\n
Many startup founders dream of the day their creation claims the top spot in Apple Inc.\u2019s app store. For Vlad Tenev, Robinhood Markets Inc.\u2019s chief executive, it was more like a nightmare.<\/p>\n
Mr. Tenev and his co-founder, Baiju Bhatt, had set out eight years earlier to bring the stock market to a new class of investors. With engineers plucked from Facebook Inc. and other tech giants, they stripped down the trading experience and eliminated commissions, making buying a share of stock about as easy as posting a photo on Instagram.<\/p>\n
It worked. During the pandemic, throngs of amateur investors\u2014homebound, bored and flush with stimulus checks\u2014opened Robinhood accounts to experience the market\u2019s thrills. By the end of December, the firm had amassed about 20 million users, according to people close to it, and weeks later its app hit the top of download charts.<\/p>\n
It should have been a moment to celebrate. Instead, Thursday of last week began with a panicked, predawn phone call informing Mr. Tenev that Robinhood needed to come up with billions of dollars if it wanted to open for business in a few hours.<\/p>\n
His day ended on prime-time television, with a CNN anchor asking Mr. Tenev if Robinhood was trying to \u201cstarve the little guy.\u201d Robinhood\u2019s breakout moment turned out to be the thing that nearly broke it.<\/p>\n
The firm that set out to bring investing to the masses had run into the reality of Wall Street, with its tangle of often-expensive regulations, overseers and Byzantine infrastructure. A tech company at heart, Robinhood at times failed to give priority to things like customer service, communications and risk management\u2014staid but essential tasks in the world of finance. It differed from most major brokerage firms in a critical way: It wasn\u2019t part of a well-funded financial colossus that had myriad sources of cash and sprawling compliance teams.<\/p>\n
Matters came to a head early on Jan. 28 when the clearinghouse that handles Robinhood\u2019s trades demanded it put up a total of $3 billion to cover the day\u2019s trading, a cushion for the risks created by a stunning run-up in a few stocks, such as GameStop Corp. GME 19.20% , fed by cheerleading on Reddit\u2019s WallStreetBets forum.<\/p>\n
The demand, 10 times Robinhood\u2019s daily requirements earlier that week, set in motion a chain of events that included stopping customers from buying the very stocks that made the app so popular.<\/p>\n
Many startup founders dream of the day their creation claims the top spot in Apple Inc.\u2019s app store. For Vlad Tenev, Robinhood Markets Inc.\u2019s chief executive, it was more like a nightmare.<\/p>\n
Mr. Tenev and his co-founder, Baiju Bhatt, had set out eight years earlier to bring the stock market to a new class of investors. With engineers plucked from Facebook Inc. and other tech giants, they stripped down the trading experience and eliminated commissions, making buying a share of stock about as easy as posting a photo on Instagram.<\/p>\n
It worked. During the pandemic, throngs of amateur investors\u2014homebound, bored and flush with stimulus checks\u2014opened Robinhood accounts to experience the market\u2019s thrills. By the end of December, the firm had amassed about 20 million users, according to people close to it, and weeks later its app hit the top of download charts.<\/p>\n
It should have been a moment to celebrate. Instead, Thursday of last week began with a panicked, predawn phone call informing Mr. Tenev that Robinhood needed to come up with billions of dollars if it wanted to open for business in a few hours.<\/p>\n
His day ended on prime-time television, with a CNN anchor asking Mr. Tenev if Robinhood was trying to \u201cstarve the little guy.\u201d Robinhood\u2019s breakout moment turned out to be the thing that nearly broke it.<\/p>\n
The firm that set out to bring investing to the masses had run into the reality of Wall Street, with its tangle of often-expensive regulations, overseers and Byzantine infrastructure. A tech company at heart, Robinhood at times failed to give priority to things like customer service, communications and risk management\u2014staid but essential tasks in the world of finance. It differed from most major brokerage firms in a critical way: It wasn\u2019t part of a well-funded financial colossus that had myriad sources of cash and sprawling compliance teams.<\/p>\n
Matters came to a head early on Jan. 28 when the clearinghouse that handles Robinhood\u2019s trades demanded it put up a total of $3 billion to cover the day\u2019s trading, a cushion for the risks created by a stunning run-up in a few stocks, such as GameStop Corp. GME 19.20% , fed by cheerleading on Reddit\u2019s WallStreetBets forum.<\/p>\n
The demand, 10 times Robinhood\u2019s daily requirements earlier that week, set in motion a chain of events that included stopping customers from buying the very stocks that made the app so popular.<\/p>","protected":false},"comment_status":"closed","ping_status":"closed","template":"","class_list":["post-4305","lesson","type-lesson","status-publish","hentry","post-no-thumbnail"],"_links":{"self":[{"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/lesson\/4305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/lesson"}],"about":[{"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/types\/lesson"}],"replies":[{"embeddable":true,"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/comments?post=4305"}],"version-history":[{"count":0,"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/lesson\/4305\/revisions"}],"wp:attachment":[{"href":"https:\/\/tharaaedu.com\/en\/wp-json\/wp\/v2\/media?parent=4305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}