Robinhood is a financial services company that offers commission-free trading of stocks, options, exchange-traded funds (ETFs), and cryptocurrency. The company was founded in 2013 by Vlad Tenev and Baiju Bhatt, two Stanford University students.
Robinhood quickly gained popularity among young investors, who were attracted to the company's low fees and easy-to-use platform. In 2020, the company had over 13 million users.
However, Robinhood has also been criticized for its role in the GameStop short squeeze in January 2021. The short squeeze occurred when a group of retail investors banded together to buy shares of GameStop, a struggling video game retailer. The move forced short sellers, who had bet that the stock would go down, to cover their positions, which drove the stock price even higher.
Robinhood was accused of restricting trading in GameStop and other stocks during the short squeeze. The company said that it was doing so to protect its users from volatility, but the move was met with widespread criticism.
In the wake of the GameStop controversy, Robinhood has made some changes to its platform. The company has also faced a number of lawsuits and investigations.
Despite the challenges it has faced, Robinhood remains a popular trading platform. As at 2022 Robinhood had 22.5 million registered users and was valued at over $8 billion. Although this fails in comparison to its previous $20 billion valuation in 2021.
The future of Robinhood
Robinhood has recruited a senior executive from Freetrade, a British fintech company, to spearhead its revived plans for a UK launch. According to Sky News, Jordan Sinclair, a former Barclays executive, has been appointed Robinhood's UK CEO, with the financial filing with the Financial Conduct Authority becoming effective earlier this month. According to his LinkedIn profile, he spent 13 months as Managing Director of Freetrade's European operations. This news followed a report by The Daily Telegraph hinting at Robinhood's plans to launch its platform in Britain, after a previous attempt to expand across the Atlantic was shelved in 2020 due to increased regulatory scrutiny in its home market.
It is still too early to say what the future as a while, holds for Robinhood. The company is facing a number of challenges, but it also has a large and loyal user base. Robinhood could continue to grow in popularity if it can address the concerns of its users and regulators. The company could also expand its offerings to compete with other trading platforms, such as Charles Schwab and Fidelity. These companies offer a wider range of products and services, and they have a long history of customer trust, something Robinhood seems to have lost a little of.