Connect with us


Robin Hood is as controversial as it makes its market debut




The stock of Robin Hood, a popular securities app for fee-free trading among millennials, got off to a volatile start on Thursday, its first day as a public company.

Online brokerage firms trading under the ticker HOOD have shifted between profits and losses around an opening price of $ 38 per share. The day ended at $ 34.82 per share, down $ 3.18 (8.4%).

Prior to the company’s market debut in Nasdaq, Robin Hood set the price of shares at the lower end of the range of $ 38 to $ 42, sold 52.4 million shares and raised nearly $ 2 billion through an initial public offering. The company has taken an unusual step to secure 35% of the shares it has offered to traders using the app. Those people will usually have to wait for the stock to appear on the exchange to buy it.

Co-founders Vladimir Tenev and Baijubat have each sold approximately $ 50 million in shares through an IPO.

Robin Hood estimates that it has 22.5 million funded accounts as of the second quarter, up 151% from the same period last year. Second-quarter sales were $ 546 million to $ 574 million, up from $ 244 million in the year-ago quarter, according to the IPO prospectus. Still, Robin Hood said it expects a net loss of $ 537 million in the second quarter.

Are there any regulatory hurdles ahead?

The stock market debut comes in a series of controversies and ongoing regulatory scrutiny in Robin Hood, including the protagonist of this year’s memetic stock phenomenon.

Trend news

For about eight years, the Robinhood app became popular during the pandemic, and investors used it to buy stock in bankrupt companies like Hertz and gather online to bid on GameStop and AMC Entertainment stock.

Customers trade stocks and options on Robin Hood’s app almost free of charge, but the company makes money by selling its users’ stock orders to other Wall Street companies.

This includes Citadel Securities, which is dominated by Ken Griffin, the founder of a large hedge fund called Citadel.

Critics claim that brokers like Robin Hood are sending their customers’ orders to the companies that pay the highest fees, rather than completing the orders at the highest prices.

Massachusetts Democrat Elizabeth Warren is one of those seeking new rules for businesses like Robin Hood, and Senators ensure disclosure of how data about customers and transactions is used. Claims that regulation is needed for this.

In May, Securities and Exchange Commission Chairman Gary Gensler pointed out potential conflicts of interest for market makers to blast the “game” of equity trading in user-friendly apps and profit from mass trading. We have shown the potential for new rules for Robin Hood and Citadel Securities. , Above all.

New probe at work

Robin Hood released a new regulatory investigation by the Financial Industry Regulatory Authority (FINRA) and the SEC on Monday. FINRA is investigating the “unregistered status” of CEO Tenef and current Chief Creative Officer Bart.

“Robin Hood is evaluating this issue and will cooperate with the investigation,” the company said in a filing.

The company has also been inquired by FINRA and SEC regarding employee transactions related to GameStop, AMC, and other so-called meme shares and is disclosed in the filing.

Robin Hood faced a big fire in January when the platform temporarily blocked users from buying GameStop and other large cap stocks. The app raised at least $ 110 million during a rally of once-sleeping publicly traded companies called meme stocks for creating extraordinary market buzz through social media networks such as Reddit.

Robinhood Investment App Faces Rebound 06:33

In December, the SEC indicted Robin Hood for not properly disclosing how Robin Hood is making money and not always providing clients with the best execution price for stock trading. Robin Hood paid $ 65 million to settle the indictment, but did not officially admit that it had done anything wrong.

More recently, in late June, FINRA ordered Robin Hood to pay nearly $ 70 million to misleading customers and cost millions of dollars. FINRA said the biggest fines authorities have ever imposed “reflect the extent and severity of Robin Hood’s breach.”

One of those customers was 20-year-old Alex Kearns. He died of suicide last year after falsely believing that he had lost nearly $ 750,000 in a dangerous bet on Robin Hood. When the account flashed red, Kerns emailed the company’s customer service three times in an attempt to ask if the negative balance was correct. He received no reaction and took his life. Robin Hood has settled a tort proceeding with Khan’s family on private terms, the company said in an IPO filing.

Robin Hood told CBS News in late June, “We have invested heavily in improving platform stability, strengthening educational resources, building customer support and legal and compliance teams. I look forward to doing it. To democratize finances for our customers and everyone. “




The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos


to request, modification Contact us at Here or [email protected]