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Tag: Robinhood

  • Robinhood Will Lay Off 23% of Its Staff, CEO Takes the Blame

    Robinhood Will Lay Off 23% of Its Staff, CEO Takes the Blame

    Robinhood is the latest company to announce layoffs, with co-founder and CEO Vlad Tenev announcing the move in a blog post.

    Like many companies, Robinhood is beginning to feel the impact of a changing economy. The platform was built around making it easy for everyday users to invest in their favorite stocks. With a downturn, however, people have less disposable income for investing.

    As a result of the downturn, Tenev says the company will lay off approximately 23% of its workforce.

    As part of a broader company reorganization into a General Manager (GM) structure, I just announced that we are reducing our headcount by approximately 23%. While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions.

    Tenev acknowledges this is far more than was initially announced earlier this year.

    Earlier this year, I announced that we would be letting go of 9% of our workforce and focusing on greater cost discipline throughout the organization. This did not go far enough.

    Tenev made it clear that he takes responsibility for the situation, saying he approved of decisions that were based on an assumed economic trajectory that didn’t happen.

    Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022. In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.

    Robinhood’s CEO is the second to so clearly take responsibility for decisions that didn’t work out and ultimately led to layoffs. Shopify’s CEO had a similar message when announcing job cuts in late July.

  • Nothing to See Here: FTX CEO Denies Plans to Buy Robinhood

    Nothing to See Here: FTX CEO Denies Plans to Buy Robinhood

    Sam Bankman-Fried, CEO of crypto exchange FTX, has denied rumors his company is looking to purchase Robinhood.

    Bloomberg reported Monday that FTX was investigating the possibility of purchasing the stock trading platform, although no official offer had been made. Bloomberg’s sources were “people with knowledge of the matter.” In a statement to TechCrunch, however, Bankman-Fried said there are no active talks with Robinhood about an acquisition.

    “We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built,” Bankman-Fried said. “That being said there are no active M&A conversations with Robinhood.”

    In its own statement to TechCrunch, Robinhood pointed out that its founders control more than half of the company’s voting power. As a result, no deal could happen without their approval and support.

    Only time will tell if the two companies end up partnering on various initiatives.

  • Robinhood Is the Latest Company to Embrace ‘Remote First’

    Robinhood Is the Latest Company to Embrace ‘Remote First’

    Robinhood is the latest company to go fully remote, embracing a “remote first” work culture.

    In the early days of the pandemic, companies around the world sent their employees home to work remotely. While many have continued to look for opportunities to bring their employees back to the office, other companies have embraced the new normal, transitioning to remote work permanently.

    Robinhood is the latest to embrace the trends, detailing its reasons in a blog post.

    In the last two years, we’ve seen how flexibility and trust allows teams to do their best work, attract top talent, and create a workplace that’s more inclusive and equitable. Our teams have done amazing work and built a strong workplace community during these uncertain and challenging times, and we’re excited to continue to offer them the flexibility they’ve asked for by staying primarily remote. 

    The company will maintain its offices, and some employees will need to live within a commutable distance for regulatory or other reasons. The company says team will still occasionally come together for in-person meetings.

    The majority of employees will continue working remotely, however.

    For a large segment of our employees, there will be no location or regular in-office requirement, and teams will come together in-person occasionally for key experiences and moments that drive connection and innovation.

  • PayPal Rumored to Be Exploring a Stock-Trading Platform

    PayPal Rumored to Be Exploring a Stock-Trading Platform

    PayPal is rumored to be looking at the possibility of creating a stock-trading platform in a bid to challenge rivals.

    PayPal is already one of the leading payment services companies, and has recently entered the cryptocurrency market. According to CNBC, the company is now looking at creating a stock-trading platform.

    Such a move would help PayPal better compete with Robinhood and similar platforms, ones that already offer both stock and crypto trading options.

    According to CNBC’s sources, PayPal may purchase or partner with an existing trading company. Either way, sources warned the company’s product will likely not be market-ready this year.

    PayPal’s stock jumped 3% on the news, while Robinhood lost 3%.

  • Robinhood Aiming for $35 Billion Valuation

    Robinhood Aiming for $35 Billion Valuation

    Robinhood is aiming for a $35 billion valuation as the company prepares to go public next week.

    Robinhood helped democratize stock trading, making it relatively easy for anyone with a smartphone to get involved. The company has built on that success by working to democratize IPO offerings too, allowing the average investor to get in on what used to be reserved for a select few.

    The company is preparing to go public, and will price some 55 million stocks between $38 to $42 per share, according to SFGATE. If the shares sell at the high end of the range, it would raise $2.3 billion.

    Robinhood also plans to offer its customers an estimated $770 million worth of stock, at $40 a share, via its own platform.

    If Robinhood reaches its target valuation, it would prove the ultimate validation for a company that has upended modern-day investing.

  • Dogecoin Accounted for 34% of Robinhood’s Crypto Revenue

    Dogecoin accounted for a whopping 34% of Robinhood’s crypto revenue in the first quarter of 2021.

    What started out as a meme has become a serious contender and a force to be reckoned with in the crypto market. The Dallas Mavericks accept Dogecoin and SpaceX recently accepted Dogecoin as payment for a satellite launch.

    Adding further evidence to its growing stature, Robinhood disclosed in its IPO prospectus that Dogecoin accounted for 34% of its total crypto revenue. What’s even more telling is that Robinhood supports trading seven different cryptocurrencies, demonstrating just how popular the crypto has become.

    While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4% for the three months ended December 31, 2020.

    Robinhood made it clear that a change in Dogecoin’s popularity could have a material impact on the company.

    As such, in addition to the factors impacting the broader cryptoeconomy described elsewhere in this section, RHC’s business may be adversely affected, and growth in our net revenue earned from cryptocurrency transactions may slow or decline, if the markets for Dogecoin deteriorate or if the price of Dogecoin declines, including as a result of factors such as negative perceptions of Dogecoin or the increased availability of Dogecoin on other cryptocurrency trading platforms.

    Not bad for something that started as a joke.

  • Robinhood Experiences Issues During Big Trading Day…Again

    Robinhood Experiences Issues During Big Trading Day…Again

    Robinhood has once again found itself in hot water after users were unable to make crypto trades during a big trading day.

    In March of 2020, Robinhood experienced a series of outages on some of the biggest market days. Users were outraged when they were unable to cash in, leading to threats of class-action lawsuits and customers abandoning the platform.

    It seems history is repeating itself, with the company once again experiencing issues, this time during a massive surge in the Dogecoin cryptocurrency. The issues caused some people to incorrectly think Robinhood was intentionally blocking Dogecoin trading, much like it did when users were driving Gamestop’s infamous rally.

    The company says crypto trading has been fixed.

    It remains to be seen if the company will lose more customers as a result of these latest issues.

  • Robinhood Blocks GameStop Trading, Faces Backlash

    Robinhood Blocks GameStop Trading, Faces Backlash

    Robinhood has weighed in on the war on Wall Street, blocking buys of GameStop, AMC, Blackberry and others, and facing backlash for it.

    Day traders have been waging war against Wall Street, targeting stocks institutional investors have recommended shorting. The traders have been using Reddit to encourage others to buy those stocks, pumping them to record heights. GameStop surged as high as $247 from the $18 it was sitting at a couple of weeks ago.

    The end result has been staggering losses by Wall Street investors who had shorted those stocks, in many cases being forced to buy them back at much higher prices. The situation has even caught the attention of the White House and Treasury Department.

    Meanwhile, Wall Street investors have denounced the phenomenon, saying it’s not based on facts or the merits of the companies’ performance. Instead, the situation seems to be the latest example of community activism, fueled by frustration over how established institutions have done business.

    Reddit co-founder Alexis Ohanian, Sr. made that point on Twitter:

    Stock trading app Robinhood has taken action, blocking trades of $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. Needless to say, users are outraged, with some filing SEC complaints and others jumping ship for competing platforms, such as CashApp.

    Robinhood may find itself reaping the same collective whirlwind Wall Street has been on the receiving end of, hurting its own business.

  • Robinhood In Hot Water Again Over Hacked Accounts

    Robinhood In Hot Water Again Over Hacked Accounts

    Robinhood has been in the news again, and not the way it wants, as some 2,000 accounts have been hacked.

    News broke that some Robinhood users’ accounts had been hacked and their funds drained. Initially, the company tried to downplay the issue, saying it was only “a limited number” of users who were impacted.

    According to Bloomberg, a person with knowledge of the company’s internal investigation said there were some 2,000 accounts that were hacked. Robinhood has recommended users take security measures, including enabling two-factor authentication. According to some individuals, however, that has not protected their accounts from being accessed.

    Customers have had mixed results in trying to get their money back, with Robinhood refunding some users while others are still waiting. Either way, many customers plan to leave the firm as a result of the hacks, the latest in a string of issues the company has experienced. In March the company suffered several outages during some of the busiest trading days, resulting in significant losses for customers.

    Needless to say, Robinhood has some major ground to make up if it wants to keep its existing customers.

  • Robinhood Rethinks UK Expansion Plans

    Robinhood Rethinks UK Expansion Plans

    Robinhood has informed individuals it is calling off its plans to expand to the UK market.

    Robinhood has gained widespread popularity as an app that makes it easy to trade stocks. At the same time, it has experienced its fair share of growing pains and controversy.

    The service has experienced multiple outages, some of which cost the company goodwill from its users. In some cases, individuals were unable to make trades on some of the busiest days of the market. Even worse, a 20 year-old student apparently committed suicide after seeing a negative balance of $730,000.

    Amid these issues, not to mention the problems the pandemic has caused, CNN is reporting that Robinhood has sent out an email informing individuals on a waitlist that it is putting its plans on hold.

    “The world has changed a lot over the past several months and we’re adapting with it,” read the email.. “On a company level, we’ve come to recognize that our efforts are currently best spent on strengthening our core business in the US and making further investments in our foundational systems.”

    Robinhood’s problems illustrate the challenges companies face trying to change the status quo in well-established industries, especially in the financial sector.

  • Robinhood Experiences Third Outage in Two Weeks

    Robinhood Experiences Third Outage in Two Weeks

    For the third time in two weeks, the Robinhood trading app has experienced a major outage during a heavy trading day.

    Monday morning Robinhood notified its customers via Twitter that trading was down and the company was investigating the issue.

    Trading is currently down on Robinhood and we’re investigating the issue. We’re focused on getting back up and running as soon as possible and we’ll update the status page with the latest https://status.robinhood.com.

    — Robinhood Help (@AskRobinhood) 3/9/2020

    An hour later, approximately 10:30 AM, the company informed users it had partially restored services.

    Trading has been partially restored on Robinhood and our team is working to get our platform fully back up and running. We’ll update the status page with the latest: https://status.robinhood.com

    — Robinhood Help (@AskRobinhood) 3/9/2020

    Shortly after 1:00 PM, the company had restored most functionality, except fractional equities.

    Trading on Robinhood has been functional for new orders with the exception of fractional equities since at least 10:25 AM ET. We’ll continue to update our status page with the latest https://status.robinhood.com.

    — Robinhood Help (@AskRobinhood) 3/9/20)

    The company has already faced threats of class-action lawsuits and loss of customers as a result of the previous outages. Customers have complained that they have lost out on some of the biggest trading days, in some cases costing them thousands of dollars.

    Robinhood is going to need to demonstrate they can solve their issues once and for all if they hope to keep existing customers, let alone continue growing.

  • Robinhood Experience Second Major Outage

    Robinhood Experience Second Major Outage

    For the second day in a row, the Robinhood trading app experienced a major outage, leaving users frustrated and angry.

    Robinhood went down Monday, leaving users unable to cash in on the stock market’s massive rally. Users turned to Reddit and Twitter to express their outrage over the app’s outage which, in some cases, had cost users money. Some users were threatening lawsuits, while others expressed hesitation to trust the app again.

    The trading app seemed to be back up and running Monday evening, only to go back down again Tuesday. All services except Market Data and Corporate Actions were experiencing a major outage, with Email Support experiencing degraded performance.

    In a tweet, the company said it was trying to resolve the issue as soon as possible.

    Our systems are currently experiencing downtime. We’re determined to restore full functionality as soon as possible. We’ll be sharing updates here and on status.robinhood.com.

    —Robinhood Help (@AskRobinHood) 3/3/20

    Shortly before noon, the company announced that functionality had been fully restored and again apologized for the issues.

    Robinhood is now fully restored. We know this has been frustrating and we will work diligently to provide the level of service you deserve.

    —Robinhood Help (@AskRobinHood) 3/3/20

    The company has said it may provide some form of compensation on a case-by-case basis, according to Bloomberg. The bigger issue for the company is the loss of trust it has experienced as a result of its missteps.