The Four Biggest Ways That Robinhood Changed Investing
A simple, app-based interface upended the brokerage business and is making its debut on a stock market that it’s already changed.
Robinhood co-founders Baiju Bhatt and Vlad Tenev.
Photographer: Damien Maloney
Not so long ago, before the pandemic took hold in the U.S., it seemed like standalone retail trading firms were a thing of the past. E*Trade, the brokerage that gained notoriety in the dot-com boom, sold itself off to Morgan Stanley. Charles Schwab Corp. and TD Ameritrade, two of the largest brokers, inked a deal to combine in November 2019, forming a single supermarket for everything from financial planning to exchange-traded funds.
But a new brokerage boom was just about to begin. Robinhood Markets Inc., the company that championed commission-free trading, is set to make its stock market debut on Thursday. The initial public offering puts an exclamation point on more than a year of flourishing retail trading action, which featured a series of unexpected antics: Ordinary investors charged in to buy shares of bankrupt companies such as Hertz Global Holdings Inc., banded together online to bid up the price of such “meme stocks” as GameStop Corp. and AMC Entertainment Holdings Inc., and piled into cryptocurrencies and options. Robinhood was far from the only forum for this kind of trading, but its colorful, easy-to-use mobile app, its success at drawing in young people, and its breakneck growth made it part of the lockdown-era zeitgeist.