December 11, 2025 • 64 mins
In this week’s episode of Earn Your Leisure, we sit down with Robinhood CEO Vlad Tenev for one of the most important conversations of the year. Fresh off a historic run that tripled Robinhood’s stock price, Vlad opens up about his proudest moment of 2025, the biggest misconceptions about the platform, and why he believes the retail investor is now the sophisticated investor. We also dive deep into the future of artificial intelligence, the evolution of predictive markets, the role of crypto in global access, and Robinhood’s mission to build a complete financial ecosystem. Vlad breaks down how AI is creating opportunity—not eliminating it—why he doesn’t believe we’re in an AI bubble, and how their new “Legend” model has transformed productivity at scale. From billion-dollar opportunities to the new Treasury-backed $1,000 investment accounts for every child born in the U.S., this episode is packed with insights on investing, innovation, and the future of finance. Whether you’re a trader, entrepreneur, or long-term investor, this is a conversation you don’t want to miss. #EarnYourLeisure #VladTenev #Robinhood #Investing #ArtificialIntelligence #Crypto #PredictiveMarkets #MarketMondays #FinancialEducation #WealthBuilding
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Episode Transcript
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Speaker 1 (00:01):
This episode is brought to you by P and C Bank.
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National Association Member FDIC. When I did the podcast with
(00:44):
you all, I was telling you probably the most impactful
interview I've done in my career, how.
Speaker 2 (00:51):
He rolls out as real.
Speaker 3 (00:53):
He wrote, Troy talk about the tags list.
Speaker 1 (00:57):
About finance, but we talk in Aguish that it is
common to the.
Speaker 4 (01:01):
People that's from the dreams that we grew up with.
Speaker 2 (01:03):
You all are the bright spot. Thank Jwership for Black Americans,
this is the knowledge that actually matters. I plaug both
of you for this.
Speaker 1 (01:13):
Thank you isn't it a country issue? Is not an American issue,
It's a world issue.
Speaker 2 (01:19):
You came to earn Lisa.
Speaker 3 (01:28):
All Right, guys, welcome back special episode. We are on
site at Robin Hood's New York office. Absolutely, Norah, glad.
Thanks for the hospitality and the whole team.
Speaker 5 (01:37):
We greatly appreciate us. Yeah, yeah, always.
Speaker 1 (01:40):
You have become a regular audience and we're very appreciative
of always getting the invite to sit down.
Speaker 6 (01:45):
Well, you guys have seen our trajectory from I think
the first time I was on your show, we were
sort of in a relatively low point in our journey.
Than each time I think it's it's better and better.
Speaker 4 (01:59):
So yeah, I'm thankful to you guys.
Speaker 1 (02:01):
I'm glad you noticed the theme every time you come
on is we just keep moving up.
Speaker 2 (02:05):
Keep going up? Yeah, keep going up.
Speaker 3 (02:07):
So flat Tenef, thank you for joining the CEO of
Robin Hood and we have a lot to talk about,
but congratulations and events for everything that you guys have
been doing over the last year has been astonishing.
Speaker 6 (02:17):
There's much much more to do. I'm always looking forward.
Speaker 5 (02:20):
Yeah.
Speaker 6 (02:21):
We are in no way, shape or form done with
our mission, so plenty more to do.
Speaker 1 (02:27):
I think when we look at twenty twenty five and
it's totality, obviously the stock has tripled, You've been added
to the S and P. What is one of the
most proudant moments this year? So that has happened.
Speaker 5 (02:39):
I think that.
Speaker 6 (02:41):
My proudest moment was it was right before Hood Summit,
which was our Active Trader event. Everyone was sort of
like we'd been working hard all year, right, and it's
not just the things you mentioned, but we've done so
many product events. We started with our Gold event, the
Lost City of Gold, where we launched a new digital
(03:03):
advisory service and Robinhood Banking, and also Cortex, which is
our AI model, so that the year started off with
a bang. Prediction markets became a big thing. We've been
spending a lot of time working on that. We have
our Active Trader event, we launched tokenization in Europe, which
in the French Riviera, where I wore a very nice
(03:25):
white pinstripe suit, and then we went to our Active
Trader event in a few weeks before. We were in
a meeting with the senior team and I said, you
know what, guys, we've been making such good progress in AI.
We haven't really shared it with the world. We've also
been making a ton of progress with Prediction Markets that
we've never really talked publicly in event for him about
(03:47):
I know everyone's working hard about Hood Summit, but why
don't we do another event too in the middle of December,
and that became Robinhood Yes No, which is happening on
December sixteenth, Prediction Markets and AI And basically I survived
that meeting and everyone was actually excited about about launching
(04:10):
new products right at the end of the year. So
I think the culture of the company is at a
point where we move fast, we do it safely, and
we've just been like shipping great product at a velocity
that makes me proud. So I think I think that's
the biggest thing from the year that that I'm proud
of and thankful for.
Speaker 3 (04:32):
So yeah, so Choice said, the stock is up two
hundred and sixty three percent over the last fifty two weeks.
So what did what did? What did Wall Street get
wrong about rob Hunt? Cause, like you said, when we
first met, it was a it was a it was
kind of a rough patch that you guys were going through,
and a lot of people kind of counted you guys out,
especially from a Stock standpoint, but just stock has rallied
(04:52):
and has been, you know, a huge success for the shareholders.
So what do you think you guys did right? And
and the people that bet against you, what did they
have wrong?
Speaker 6 (05:05):
The number one thing is probably product velocity, being able
to ship so many products at high quality quickly, at scale,
and when you couple that with a large, already engaged
customer base, we can distribute the product very effectively to
customers and that's led to increase in revenues. So we've
(05:29):
been able to increase revenues and actually the growth rate
of revenues has been quite high year over year while
simultaneously improving margins. I think that's a rare combination. There's
this financial metric called rule of forty that maybe you
guys are familiar with. Sometimes people compare companies on this metric,
(05:51):
and basically you add your revenue growth rate to your margins,
and if the number is greater than forty, that's sort
of like a good target. So revenue growth rate plus margins.
And the argument there is you can be growing fast
and have low margins and that's okay. That's like a
(06:13):
considered a good investment, or you could be growing more slowly,
but if your margins are good, then that compensates for it.
And I think our last rule of forty print was
over one hundred. So if you plot all the companies
in SEP. Five hundred across, this metric robin is just
a huge outlier. And it's because we've been able to
(06:33):
grow very quickly while also improving margins at the same time,
and I think that's a rare combination for public company.
Speaker 1 (06:43):
When we first met, it was just before the idea
of the meme stock, which obviously your platform got a
lot of flat four and it was, Oh, the retail
traders don't know what they're doing. And then we saw
you speak and we met again, and was the idea
of like, the retail trader is the sophisticated trader. Yeah,
(07:03):
talk about the role and how that's transpired over the
past two or three years to now that everybody's in
on it, Like way the retail is where we can
get a lot of our customer based from because they
have the tools.
Speaker 6 (07:16):
I think companies are waking up to this. You know,
we were relatively early to embrace the retail trader because
the retail trader is our customer. So of course we
have a natural incentive as a company to have our
customers be shareholders, right because not only are they are shareholders,
(07:39):
but they're people that use the product every day. You know,
our product is a stock market investing product at its core,
and one of the things that I'm very proud of
is the work that we've done on IPO access. I
mentioned you guys a little earlier. It is my second
trip to New York this week. First time I was
at the New York Stock Exchange on Tuesday at a
(08:01):
round table called make IPOs Great Again.
Speaker 5 (08:04):
It's funny name.
Speaker 6 (08:05):
They had the red hats too, which, by the way,
the idea that the administration and the regulators are coming
to Robinhood as a representative of the retail investor to
collect feedback for how to make capital markets and IPOs
better was something that probably I wouldn't have imagined the
(08:26):
first time we met in twenty twenty two. So pretty
crazy how quickly things can change. But when we went
public in twenty one, we rolled out this product called
IPO Access, and the idea was not just have IPOs
be for the chosen few, the elites, the high net worth,
the private wealth folks, and obviously the institutions. But how
(08:47):
do we plug robinhood investors directly into IPOs and get
them allocations at the same price on a level playing
field with the institutions. And so our IPO at the
time was I think the largest IPO retail allocation for
an IPO of its size, and we tried to get
(09:07):
other companies on board. We got some, but they were
very skeptical and reluctant. You know, some people actually, to
be fair, really bought into it, but most companies we
had to ask for favors, and you know, they would
throw us a few scraps, like we'll give you half
a percent of the IPO allocation. So we really asked
for favors and people didn't really get it.
Speaker 5 (09:29):
They're like, what's the point.
Speaker 6 (09:30):
I'm just trying to take my company public, go through
the process, get it over with so I can get
back to running my business. They didn't really see the point.
And fast forward to twenty twenty five this year, when
the IPOs have come back, every company of consequence has
basically come to us and asked, let's talk about our
retail strategy. How do we get retail more engaged. And
(09:52):
you started to see the CEOs of those companies when
they're doing their press about the IPO, talking about how
retail's big concent tituency and saying, you know, in the
case of Bullish CEO, we give retail twenty percent allocation.
It's one of the largest retail allocations ever. Gemini CEO,
the Winklevost Winds gave a huge retail allocation and you know,
(10:15):
now it's it's completely shifted where retail is definitely being
a first class citizen. So what we're trying to do
is push that forward, go deeper into IPOs and continue
the leadership we have there. Post IPO. We want to
make the brand of being a public company a little
bit better. I don't know if you guys have I'm
(10:36):
sure you talk to a lot of entrepreneurs, some of
whom are public. Generally, the perception and the way they
talk about being public is negative. We have to be public,
but I hate earnings calls.
Speaker 5 (10:47):
I hate this.
Speaker 6 (10:48):
I hate that it's a chore. And what I'm trying
to do is shift it into being a positive thing.
So rather than thinking of your earnings calls as a chore,
how can they become fun? Can you as the executive
have fun during earnings and also can the audience actually
enjoy watching it. So we've been investing a lot in
actually making our earnings calls not just informative, but entertaining.
(11:12):
So for the last one, we did it at the
Chase Center, home of the World to State Warriors, and
we not only had the cell side analysts, who's the
typical earnings audience, but we had buyside investors. We also
had the media, so the media was at our earnings
calls and everyone could ask questions on a level playing field.
Speaker 5 (11:33):
We had retail investors via.
Speaker 6 (11:35):
Zoom asking questions, and then of course the whole thing
was televised, so it was on live stream on social media.
And you know, go back a year ago, our earnings
calls were on a polycom audio only. We had maybe
like hundreds of people listening, and now it's gone to
tens of thousands, so orders of magnitude increase in the
(11:57):
audience for earnings. And now we're starting to actually export
this as a product to other public companies. So Open Door,
for example, they saw what we were doing, they said,
we want to engage retail. We want retail to be
our number one constituency, so we work with them to
live stream their earnings to our audience in the Robinhood
app and we've heard from many people that they'd like
(12:21):
to start doing this. So I think you'll see earnings
calls becoming fun and I think the brand of being
a public company start to shift into a more positive thing.
And also on the other side of the spectrum before
a company is going public, when they're still private, we're
hard at work trying to get retail exposure on the
private side and making that a little bit easier. We
(12:42):
have a great initiative called Robinhood Ventures, which is going
to be in the US, and we're launching a closed
then fund that's on file with the SEC right now,
so we're actually in the quiet period. I can't talk
much about it, but the ideas make it so that
retail investors can invest in the best private companies before
they go public. So we're kind of tackling it across
(13:06):
every part of the spectrum.
Speaker 3 (13:08):
Yeah, talk about just from a retail standpoint, how that's changed,
and you guys played a major part in that. Retail
investors used to be called dumb money. Yeah, not really
taken seriously because they were not educated. But now they
have a higher level of education platforms like ourselves and
your platform, and they're more respected. But there's also more
(13:29):
risks because they're taking more risks now too, right Like
they're they're doing things that a lot of people didn't
even think about doing before, as far as options and
futures and you know, leveraging different things in that nature.
So what is your thoughts on the state of a
retail investor in twenty twenty five and what are some
opportunities and what is some dangers that they need to
(13:51):
be aware of.
Speaker 6 (13:52):
I think that retail investors. I think retail investors being
a bigger chunk of the markets is a very good
thing for companies because you notice a lot of times
there's some macro event like we saw it this year
with the tariffs. We saw a couple of weeks ago
(14:17):
with the sort of like FED decision in December, is
the Fed going to cut maybe they'll refrain from cutting,
And that affects the markets. And it's because institutional investors
tend to like make broad portfolio moves without really looking
(14:37):
deeply at each individual company. It's sort of like I'm
risk off. I'm going to reallocate for my stocks to
fixed income or move to cash. Retail investors tend to
invest directly in companies, and they make their buy and
sell decisions based on the company doing well. So, for example,
when the tariffs hit, you know, so you saw a
(14:57):
lot of growth companies that probably weren't directly affected by
tariffs hit rather hard by that, right, and retail investors
looking at this and saying, why this company just go
down forty percent doesn't make any sense. Tariffs have nothing
to do with it. It's just because hedge funds are
(15:18):
selling everything, right, So then they bought it and they
became net buyers, and then they became rewarded for it.
So I think the more retail investors come to the market,
the less this like indexing thing is going to lead
to price dislocations. I think the more signal you'll get
of people buying companies because they actually want to invest
(15:38):
in that specific company. And I think also retail investors
are smart, and what's really attractive about companies is they're
not only smart and doing like careful analysis and posting
it on social media, but when they become investors, they
become kind of defenders and fans of the company. I
(15:58):
think one problem you're seeing with the AI companies right
now is AI technology is very popular. People are adopting it,
but the AI companies themselves are very unpopular. They don't
have that many fans. If you see criticism about you know,
say Open Ai or Anthropic, the people rushing to defend
them are either venture capitalists online or you know AI
(16:22):
researchers that work at these companies. But you compare that
to crypto. You know, if the crypto industry is under
threat from you know, regulatory overreach, or even if just
someone says something negative about bitcoin, you just have an
army of retail people that just take the knives out.
(16:44):
And you know, people are nervous to say anything negative
about bitcoin now. And I think it's because the one
thing crypto got very very right from a very early point,
I mean from basically the genesis of it is making
it so that normal people can have crypto. And then
you see everyone's invested in crypto. You know, you've got
tens of millions of people in this country, so they're
(17:04):
going to defend it because they own it. And I
think AI doesn't have that property. The big private companies
are held by wealthy insiders, so they don't have as
many defenders, and I think that could become a big
problem for them, because you know, if it starts taking
more jobs or at least disrupting the labor force at
an accelerated rate, I think people are going to get
(17:26):
angrier and angrier. I think what's going to happen is
if regulations come, they're not going to have people fighting.
The everyday person might not be on the side of
the big AI companies. I think that's a threat to
the technology.
Speaker 1 (17:39):
Yeah, there's some talk from a lot of leaders in
AI about the regulatory environment and how if it gets
too stringent, it will be full behind. Obviously, I'm sure
you're part of some of these conversations from a broker standpoint,
but also from the cryptal standpoint. How do you see
it in terms of this race in AI.
Speaker 6 (17:58):
Yeah, it's interesting to me to compare how much regulation
is in financial services, you know, quite a bit highly regulated,
compared to what we've seen with AI, which is actually
very little, like it's mostly been allowed to go in
and disrupt and and you know, it's hard to say
(18:21):
that that's been wrong because thus far, I think that
the effects have been largely positive from my standpoint. I mean,
you're seeing increases in productivity largely. It hasn't displaced too
much labor participation. But you know, the models are getting
(18:42):
better and better, and I think we've gone from just
summarizing information that's already out there to creating new knowledge.
And you know, the knowledge is maybe small bits and
chunks here and there, but you can imagine as they
get better, you know, the knowledge being created and the
discoveries being made, and maybe new inventions will come that
are more and more complicated. So then it starts to
(19:04):
get scary and you start thinking about, you know, how
big is the disruption? How do we mitigate the negative effects?
And I think the best way is to make sure
people are invested in it. Yeah, so that you know,
at least you own the thing that's disrupting. You're you're
always you're always going to be in better shape if
you have some a stake in the agent of disruption.
Speaker 2 (19:24):
Yeah.
Speaker 1 (19:25):
I just a follow up because I asked that because
I watched your clip where you talked about your belief
in artificial intelligence on the record, saying that it's going
to create a new world order, diminishing people's chances to
earn income from labor, and fueling participation in markets and
trading on brokerage apps. And when you said it, I
was like, this is what we've been saying all along.
You have to invest. It's the only way probably going
(19:46):
to do it. Speaking to that audience now of who's
going to be interrupted and disrupted, knowing that your brokerage
has a youth movement, it just feels like those things aligned.
How are you viewing it in the terms the future,
in terms of the disruption and investing.
Speaker 6 (20:02):
Yeah, I mean I think that when I talk to people,
it sort of like breaks down by age a little bit.
So for older folks such as myself, I don't think
they're worried that much. They're like, oh, well, you know,
we're going to retire soon, and not exactly for me,
I'm not going to retire soon.
Speaker 5 (20:22):
But you know, if you're in a certain.
Speaker 6 (20:23):
Age, you're already mid career or a late career, you
probably don't care as much. Young people in their twenties
and thirties going to two buckets. Some are like Super
Bowl and they're like, I'm going to use AI to
build a company. Very entrepreneurial people who are very excited
about this, but yeah, there's you know, folks in their
twenties that are maybe a little bit less entrepreneurial that
(20:44):
we're sort of like planning on a stable career path,
and they're very nervous. They don't know if that job
that they were maybe going to college to get is
going to be around in ten years, and there's a
lot of uncertainty. I think there will be job disruption.
I think certain categories are easier to product predict than others,
(21:05):
Like it probably wouldn't want to go into telemarketing right
now as a as a profession, for example. But I
also think there's going to be new jobs that are
that are created and new job categories. And I mean,
for example, your guys' job, like a influencer and content creator.
It's very hard for people to be influencers and content
(21:27):
creators even ten years ago. Right this is like a
new thing. So I think you'll get a bunch of
new things like that. And I think the field that
you guys are in is are going to continue to grow.
There's going to be more people that are that are
going into that path, so not all is lost, and
I think the jobs of the future will tend to
(21:48):
look like leisure to us.
Speaker 5 (21:52):
Yeah.
Speaker 6 (21:52):
I mean, you imagine fifty years ago, like our grandparents
in the workforce working at a big company, or maybe
one hundred years ago if they're working in a factory
or something like that. Looking at what we're doing today.
You guys are recording shows. I'm at a computer typing.
You know, probably wouldn't have looked like real work. They'd
(22:12):
be like, oh, these guys are just horsing around. You know,
why aren't they picking up tools and building stuff?
Speaker 5 (22:19):
You know.
Speaker 6 (22:19):
But you know, we take our jobs very, very seriously,
and I think we'll probably have that same view of
people two generations from now.
Speaker 3 (22:28):
So you're not you're not worried about like doomsday scenario
when it comes to AI.
Speaker 6 (22:32):
I think that we'll be able to manage it. Yeah,
I'm very I'm very optimistic. I mean, I don't think that.
I think a lot of people feared about a fast takeoff.
And you know when you guys saw GPT four came
out and it was like a big change qualitatively over
GP three T three point five, the original Chad GPT.
(22:55):
Now we're on you know, GPT five, Gemini three. These
models are good, but it's not like each one getting
ten times better than the last. And there was this
report twenty It was called like AI twenty twenty seven
by an AI researcher. Maybe you guys have read this,
and you know recently they updated and they're like, Okay,
(23:15):
we thought everything would happen by twenty twenty seven. It's
going a little bit slower than we imagine. We're revising
it to twenty thirty. So AI researchers call that a
slow takeoff scenario, and a slow takeoff is sort of
good because that means we'll have more time than we
thought to adapt and actually, you know, make changes. So
(23:37):
I think we'll get there. I think initiatives like getting
more people in the markets, making sure the young people
and the babies have brokerage accounts from birth through the
Invest America initiative will get us there. I think there'll
be more entrepreneurship, and probably that entrepreneurship will look like
leisure to us today, which also is a good thing.
Speaker 3 (24:00):
Where do you see crypto going, because obviously that's the
major staple in what you guys have built with Robinhood
in twenty twenty five, let's say twenty thirty five, right, Yeah,
where do you see crypto going and bigcoin specifically.
Speaker 6 (24:15):
Yeah, I think the biggest needle mover for crypto is
that it's going to help take the great things we
built in the US and make them increasingly global and
available to investors all around the world, some of which
haven't had access to these tools, because I think we
(24:36):
kind of take it for granted here that we have
the US dollar, we have access to US stocks, we
have really high quality assets. When Robinhood gets our private initiatives,
we'll be able to distribute access to private companies, so
we have really good investments and ways to allocate your capital.
If you're in Venezuela, you don't have access to those things.
(24:57):
And that's actually why stable coins have been soapower popular,
because you know, a lot of these people are in
countries that have unstable governments, unstable central banks. If they
do have central banks at all, they don't have functional
banking systems. Currencies are devaluing, and they're just adding zeros
and zeros to them. The bills are worthless. So stable
(25:20):
coins really became popular as a way to store your
wealth in US dollars, because you know, the crypto companies
actually went in and built local rails connecting to all
of these markets, so they've been plugged into the crypto system.
And I think crypto will evolve with tokenization to make
(25:43):
it easy to distribute US stocks and other investments overseas
as easily as stable coins have done it to dollars.
So I think that's the future. Crypto will sort of
like the technology will help stitch together all of the
markets that make it so that everyone is on a
level playing field, uh outside the US as we are
(26:03):
in here. That's at least the future that we're we're
working to build.
Speaker 3 (26:07):
So you believe in o ecosystem, not just bitcoin. Not
a bitcoin maxie.
Speaker 5 (26:10):
I'm not a bitcoin maxie.
Speaker 6 (26:12):
Yeah, I mean I'm a bitcoin fan, and I think
bitcoin uh has an inherent advantage. Price prediction, Oh, price
predictions are tough. I would tell you, I'm pretty I'm
pretty bull And if you told me at the beginning
of the year that there would be like a National
(26:34):
Bitcoin Strategic Reserve and all of these dats and we
would still be sitting here basically flat for the year,
maybe a little bit up, I'd be, I'd be surprised.
It's got a lot going for it. It's a singular asset, right,
it'll it'll always be the first.
Speaker 5 (26:50):
So I think.
Speaker 6 (26:50):
I think it's got a bit of a religion around
it with the bitcoin maxis and and that's hard to
fight relative to the other coins.
Speaker 1 (26:58):
Yeah, I think obviously, if you look at the correlation
between the rise of bitcoin getting up to one hundred
and twenty six thousand, you watch your stock also get
towards all time high around the same time. People feel
like there's a correlation there, but there's also a piece
that has helped the stock, and that's the predictive markets.
So not only could you invest in bitcoin, but you
could say, hey, I see it getting to one hundred
(27:20):
thousand by December thirty. First, talk about the role that
predictive markets is played, because we talked about it like
you were thinking about it. We were talking about probably
market the last time we met in Miami, and now
predictive markets are a thing, a real thing that I
feel like you guys have adopted right away. Some of
the other people in the space haven't, and they're looking
at you guys like this is a leader.
Speaker 4 (27:41):
Do we need to add this. This is going to
be disruptive.
Speaker 6 (27:44):
Yeah, absolutely, And it's kind of a fun position for
me to be in because typically when you look at
crypto and all the other products we've added, I mean,
stock's probably the best example. We were like years after
the leaders, right, I mean stocks went electronic in the eighties.
Basically e trade got started. The idea was to trade
(28:06):
stocks on the Apple macintosh. Apple Macintosh had come out,
and these two guys got together in Palo Alto, California,
and we're like, what if we use the Apple macintosh
to trade stocks? And I think that was in nineteen
eighty two, which is pretty crazy. So we were multiple
decades late to the game for electronic trading in stocks.
(28:28):
Crypto started in two thousand and nine. We added crypto
to the platform in twenty seventeen. Actually, yeah, twenty eighteen
was when you could start trading it. So typically we've
had an approach where we come in after there's like
clarity that it's a real thing that people want, and
then we just bring our scale, lower costs, and you know,
(28:51):
better ux to the product. So Prediction Markets is a
new one for us because we were kind of out
in front and then it's sort of like how do
we maintain our lead and market position, and you know,
when we have a bunch of people coming after us.
It has surprised me that, you know, you have the
exchanges like like Polly and Calshi, who have obviously been
(29:11):
there from the beginning, but like no other broker has
has gotten into it yet, no other broker of significant consequence.
And I think they're coming like they're seeing what we're
doing and they see that it's resonating with traders and
and just with mass market retail. But yeah, I think
(29:32):
we're also moving and we're adding new innovations. I think
the event that we're gonna we're gonna unveil on the
sixteenth is is going to show some new things to
people that they haven't seen before. And it's the fastest
growing business that Robin Hood's had. You know, in the
past year, we've gone from one single contract, which is
the presidential election, to over fifteen hundred. We've gone from
(29:58):
it's basically the volume is doubled. Quarter over quarter. Q
three had I want to say, two point two million contracts,
but then October had two point five million, so more
than Q three put together and then you had November.
We announced the November numbers, three billion contracts traded in November,
(30:20):
which is yeah, it's a thirty million revenue in a month,
so three hundred and sixty million run rate if you
take the November numbers, which is a big ramp, and
I think, you know, it's just been really resonating with
the traders.
Speaker 2 (30:40):
And sports betty.
Speaker 6 (30:42):
Sport's a big part of it, but the big part
of what we're doing is also diversifying the contracts. So
it used to be just elections and elections I think
to me is probably the most interesting. Then we added
sports and we've added a ton of leagues. There what's
betting or like, what is it exactly? I liked most
(31:05):
people I took to call it wagering.
Speaker 2 (31:08):
Wagering, Okay, I like the language there.
Speaker 6 (31:12):
I think it's different in all seriousness to sports betting,
and a lot of people ask about, you know, how
is it different from a regulatory standpoint, from a product standpoint.
I think it's significantly different. And I haven't really done
much sports betting, but what people love about it is
you can actually trade these contracts during the game, so
(31:37):
you know, the because it's a it's a two sided market.
The exchanges run the contracts while the games are happening,
and that's when the information is coming in. I mean,
for example, you can see how each play changes, changes
the odds and the outcomes, and you can go in
and out of the positions, and a lot of the
(31:59):
market part pints that are coming in both from the
market maker side and sort of like on the trading side,
are the same market participants that have been trading futures
and equities. So I think it's disruptive to sports betting,
but I see it as a fundamentally different animal and
a better product, which is why I think all the
(32:20):
traditional sports betting sites are so nervous about it, and
they're just sort of like, uh yeah, they see the
writing on the wall, and they're they're working as hard
as possible to figure out their prediction market strategy, and
some of them are outright pivoting to prediction markets completely.
Speaker 1 (32:39):
As soon as you said the November's numbers went up,
I automatically thought NFL and its height constable, and it's height,
but it's not just sports and NBA.
Speaker 4 (32:45):
NBA is and it's kicking off. World Series is just
about the end.
Speaker 5 (32:49):
Well, and we have you.
Speaker 6 (32:50):
I think we mentioned this earlier AI model contracts, which
you know is a space I feel like I have
some understanding of. And you have traders that are specialized
in very specific areas. And you know, like four months
ago it was I think thirty five percent chance that
Gemini would have the best model by the end of
(33:13):
the year. Chad Gpt started the year ahead.
Speaker 5 (33:16):
Right, and you know, if you really.
Speaker 6 (33:21):
For folks that really kind of understood what was happening
in the AI world, it seemed like conventional wisdom was wrong.
Speaker 5 (33:27):
Right.
Speaker 6 (33:27):
You have Google, who's on a steep trajectory, and they
have all the data, all the compute, they're highly motivated.
I think now we look at the Gemini release and
it's like, well, it's so obvious they had all these tools.
But back then, I think conventional wisdom was wrong. So
I think for a trader, it's going to open up
more possibilities, and you know, you can specialize in things
(33:50):
because there's probably at least one topic that each person
understands better than the average conventional wisdom. So I think
it'll pull in more traders. But I think the most
interesting thing for me is that it creates a new
source of information. It's almost like the new media or
new news, or instead of watching talking heads pontificating about
(34:11):
what's going to happen, you can just look at the
market and then you'll learn a little bit about what's
likely or what's even what's even true in this world?
Speaker 3 (34:20):
Do you have any reservations about this, because it's like
young people now are they're betting on sports more than
they open in Brogridge accounts. So we know that gambling
has been long history in America, but most of the
time people that gamble lose money, right, So that's boys
been a thing of like, well, what's the difference between
gambling and investing for a long time you can say, well,
(34:40):
investing is a game of knowledge and gambling is a
game of chance. Right, Like you invest in the s
and P five hundred, you hold it, you're going to
make money. Vegas is a fifty to fifty chance. But
now essentially the worlds are colliding and investing is kind
of turning into gambling like prediction markets. Right, it's kind
of like a form. It's a form of gambling and
a more sophistic decated way.
Speaker 2 (35:00):
Right.
Speaker 3 (35:01):
So even with the political thing. I mean, we see
what happens in sports betting. People bet a lot of
money on sports. They're going to do things to determine
that their team is going to win, which leads to corruption,
which we see FBI have an investigation on the NBA. Now, yeah,
the same thing could happen in politics. If I bet
a million dollars that the Senator is going to win,
like you know, now you get into a very gray
(35:23):
area of very you know, kind of a dark, dark
pathway that could be followed. So I say that to say,
do you think that this is actually a form of
gambling and do you think that it is kind of
opening doorways to you know, a new way of people
(35:44):
just instant gratification gambling on everything in society.
Speaker 5 (35:49):
I think it's a little bit different.
Speaker 6 (35:52):
I mean, if you look at financial markets, there's been
there's been a lot of people think trading and gambling
are one and the same. I think it's a little
bit different, and I think every financial market has been
sort of like under this attack. When future trading first
(36:13):
rolled out to retail a few decades ago, you know,
a lot of people ask this question, why is a
retail investor speculating on the price of oil or corn.
They're certainly not hedging their corn exposure in any significant way.
And I think the answer is, in order for a
(36:33):
market to work, you need speculators. And then some people say, well,
you know, what's the difference between speculation and gambling. It's
kind of two words describing the same thing. You're making
a short term price prediction on what's going to happen,
and you know you're putting your money, putting money behind that.
And of course when you're putting money behind a short
(36:53):
term price prediction, there's risk involved. But I think we
need the speculators because without the speculators, the market isn't
effective for the hedgers, So every market requires speculation in
order in order to work. Now, I don't think everyone
should be speculating with all of their money, but I
(37:17):
think what we're seeing is people have different buckets. You know,
they have. Even the most active traders that we have
on the platform, those are the ones that tend to
be most likely to open up retirement accounts as well.
So you know, we do have people that are just
using Robinhood for trading, but if you take a typical
(37:40):
active trader, they tend to be the ones that use
us for all of their things, so that they'll have
a retirement account, they'll have, you know, a discretionary and
maybe they'll have a dividend portfolio. We rolled out a
nice feature called multiple brokerage Accounts, which actually lets you
put your money in different buckets. And you know that
increasingly we have bangs, So we've got there, you know,
(38:01):
checking and savings accounts with us. So what it looks
like is a trader comes in, maybe they come for
prediction markets increasingly, or crypto or stock and options trading,
and then they open up a bunch of accounts with us,
they use a lot of our products, and then all
of their ideally all of their money ends up at Robinhood.
(38:24):
But yeah, so in a hypothetical world where everyone was
just speculating one hundred percent of their money, I think
that would be not great for society. But that's that's
not what we're seeing. And in terms of what we
incentivize as a company, you know, the behavior that we incentivize,
we incentivize retirement. So a retirement account is the one
(38:45):
where rock bottom costs three percent match, so we actually
incentivize you to put to put money in and that's
been incredibly successful, over twenty five billion in assets, one
and a half million funded retirement accounts. I think among
the fastest growing, if not the singular fastest growing retirement
product of all time. So what we really want to
(39:07):
build is we want to be your financial super app.
We want to be your primary and your secondary financial account.
Speaker 5 (39:15):
So all of your.
Speaker 6 (39:16):
Activities should be should be done at Robinhood. And you
raise the integrity concern, Well, how do you know that
someone's not, you know, taking advantage of their inside information
to make money on these things? And I think this
is a criticism that you can levy on you know,
(39:38):
the conventional sports books as well, and they've gotten into
some heat for that, and they're saying, well, this is
why it has to be regulated by the States, because
we have all the machinery. Well, the financial markets have
been dealing with market integrity concerns for decades. Like you
can imagine, it's pretty analogous to a corporate insider or
(39:59):
someone that works at a company using information that they
have on a in on an upcoming product launch to
make money. And you know, we have robust safeguards in
the form of trade surveillance, monitoring, And it's actually one
of the benefits of doing this in a in a
(40:21):
regulatory environment that has all of that set up, rather
than you know, doing it offshore where all bets are
off no pun intended, and there's no control, so that
it's happening anyway people want to do it. It's like
a growing regulated market, and I think it's better to
have it in a place that has controls than the alternative.
Speaker 1 (40:44):
Is there a part of you in the team that says,
let's meet our customer base where they are or maybe
where our future customer base is. Right, if we know
that we've seen the spike of DraftKings, we've seen Flutter,
which obviously owns FanDuel.
Speaker 4 (40:58):
We've seen casino.
Speaker 1 (41:00):
Apps come and just take over, right even New York
haven't sports betting now what we've seen income If we
know that they're there, if we order for predictive markets,
is an opportunity to sees go from one spectrum to say, hey,
there's more things to offer outside of just the sports betting.
There are the retirement plans, there are broketure accounts that
you can open.
Speaker 4 (41:20):
Is part of it. Let's meet them where we're at.
Speaker 1 (41:22):
So we can convert them as well over to what
we have as a totality.
Speaker 5 (41:27):
I think that's a big part of it.
Speaker 6 (41:28):
I mean when I say we want to be your
primary and secondary financial account, what I really mean is
you should deposit your paycheck into robin Hood Banking. We
should be the place where you have your savings account,
your emergency fund, and you should of course have your
retirement and if you want passively managed investments, we've got
(41:50):
robbin Hood Strategies, which I think is far and away
the best digital advice product on the market that launched
earlier this year and rapidly went to.
Speaker 4 (41:59):
Over a build an educational standpoint.
Speaker 6 (42:02):
Well from educational standpoint for sure, but also just if
you want a money button where you just put money
in the account and it's invested for you reasonably at
the lowest possible costs, I don't think there's a better
digital advice product like robo advice is what it competes with.
And then of course your discretionary trading and investing. So yeah,
(42:26):
we think we can serve all of your dollars. Right,
your money should come into Robinhood and essentially we should
make it so that you never feel like you have
to transfer money out. And I think when we saw
the rise of sports betting, which happened with the deregulation
(42:47):
of gambling at the end of the last decade, you know,
and you see the articles where actually it's been growing
incredibly quickly. Young people especially are doing more of it.
I think we had a little bit of a choice
to make. You know, do we fight against this, you know,
do we go out and say, you know, we're against
it and people shouldn't be doing it, or do we actually, uh,
(43:12):
you know, take the stance that we think people should
be free to do whatever they want with their money,
of course, within reason, and we want to make it
a safe environment for them to do those things. And
I think the reality is there is a lot of ways,
there's a lot of ways out there that you could
(43:35):
not even invest. But also just like spend money frivolously.
I mean, we're just being bombarded with ads for buying
different things, and you know, not not even just money,
but time all these like digital video platforms that are
just engaging us and sucking up our time. So uh,
(43:57):
if you look at you know, the broader things that
are keeping you from doing good behaviors, there's a lot
of distractions out there, And I actually worry less broadly
about sports betting than you know, social media becoming super
addictive and just sucking up all of our free time
because time is also money. Right, You're spending four hours
a day on social media, that's that's that's time you
(44:21):
could be spending doing other things. So yeah, I think
I think that at the end of the day, you know,
people have to make their their own decisions for how
to spend their time and money, and we have to
do the best to help them do do things that
are good. But ultimately, you know, the the users in charge.
Speaker 3 (44:44):
Do you think that there's gonna be AI bubble? And
do you think that the economy as a whole is
headed in a negative dimension? A lot of people are
forecasting a recession. Some people think that we've been in
a recession. So what'sh your thoughts on a greater economy
going into next and a year after, and what's your
thoughts on so much talk about the AI bust happening?
Speaker 6 (45:07):
Yeah, I mean, to some degree, we're always in you know,
no new technology that's as popular as AI is just
a smooth up into the right right, people get excited
about things. There's corrections. You saw it with crypto, you
saw it with the Internet in the dot com. It's
(45:29):
a question of where we are in that cycle. And
my take is we're still rather early, Like we haven't
even seen AI I pos yet. Right, We've got two
companies that are really, really big AI native companies, in
Vidia and Google. You look at them from a fundamental standpoint,
I don't think their price earnings are completely out of
(45:51):
whack by historical measures. So yeah, near term, I would
say that public markets, they they don't seem overly like,
they don't seem like they're overvaluing what we're seeing in
(46:11):
AI yet.
Speaker 2 (46:12):
Uh.
Speaker 6 (46:13):
And I don't think a lot of the the AI
companies that are private h. I mean, you know, you
can you can debate how real the data center build
out is going to end up being. And I think
some of those things are rather complicated to to parse.
(46:34):
You know, the spend commitments with the chips, but if
you look at the fundamentals, people are buying chips. The
models are improving.
Speaker 1 (46:41):
Uh.
Speaker 6 (46:41):
The researchers say, you know, they don't see an end
to reinforcement learning and pre training seems intact. So the
models are continuing to get smarter, which makes me feel like,
at least in the near term, we're gonna we're gonna
keep seeing AI driving forward.
Speaker 4 (47:00):
Yeah.
Speaker 1 (47:01):
So we talked about predictive markets, but one of the
biggest revenue models for you guys lies in options trading. Yeah,
zero day trading, futures trading. With the new technology that
you guys launched last year. Talk about the impact that
it's had obviously on the company and where you're seeing
your retail investors. Are they staying, are you seeing more
(47:21):
people in those spaces?
Speaker 6 (47:23):
Yeah. Legend has been growing remarkably quickly. So Legend is
our desktop active trader platform, and you know, month over
month we're seeing we're seeing continued growth and acceleration there,
and it's sort of like activity we wouldn't have gotten otherwise.
(47:43):
So I think active traders before we rolled out Legend,
they were using our competitors because they need multiple screens,
they need, you know, to chart on the same page
as entering the order, so we weren't serving them optimally
on mobile. And these are our most engaged customers. Every
(48:03):
time I ask, you know, how can we make Legend
better on social media? I just get hundreds of comments
of all of the specific things they want us to improve.
So what gets me most excited is it's already quite big.
People are already quite happy, and I have just just
a endless list of more things that they want, and
(48:25):
I've got a great team on it that's like moving
really fast and super motivated. So I think that's going
to be a tailwind for the business. And we're doing
things on Legend that nobody else is doing, incorporating AI
tools to make it even more differentiated experience for our traders.
I think for an active trader, they should feel like
(48:46):
they're at a disadvantage using any other platform than Robinhood
and the couple other things we're doing. Besides the AI integrations,
we've added index options, which was a very common quest.
Index options they trade around the clock. It allows you
to hedge with the broad based market or index and
(49:09):
really quickly, we've just grown our market share there to
the point where you know, we're we're now among the
biggest players, if not the biggest option same story that's
been more steady. We were already quite big, but if
you look at the market share numbers, which which are public,
we're either number one.
Speaker 5 (49:28):
Or TI tied to number one every time number one.
Speaker 6 (49:31):
Yeah. So so we've been doing well. Yeah, and and
I think we're on a path, but yeah, there's more
to do. We're still under penetrated on web, where a
lot of the of the market is. So I see
Legend continuing to drive that. Our AI tools are still nascent.
I think those are going to get a lot better.
Speaker 5 (49:51):
And then you know, you.
Speaker 6 (49:53):
Could see actually prediction markets high overlap with our active traders.
You could see that becoming more integrated into Legend. It's
not even on Legend yet, and across all of our
other surfaces.
Speaker 3 (50:05):
So before we leave, I just wanted to ask you
a question about I know you and a lot of
other tech billionaires have spent a lot of time in DC. Yeah,
so I want to get your thoughts on on the
current administration, your conversations with the president and different initiatives.
And then I think you have another story to tell
about another politician that's been you a gift. Oh yes, yeah,
(50:25):
let's talk about politics. Le's talk about politics for a minute,
shall we.
Speaker 6 (50:28):
Let's do it. I mean, from from the very beginning,
I think Robin Hood has built ourselves up to be
and you could say at the beginning, it was inadvertent.
I think the philosophy of most Silicon Valley companies would
be stay out of politics, at least when we got
started in the middle of last decade, just build your
stuff and you know, probably ignore what's going on in Washington.
Speaker 1 (50:53):
Uh.
Speaker 6 (50:54):
And we started during the Obama administration, so we've gone
through Obama, Trump one, Biden and now. So we've had
a good mix of you know, first being ignored, then
having generally favorable conditions during Trump won, but maybe not
as favorable as now, and then the Biden administration, which
(51:14):
was just outright hostile to crypto and retail trading in general.
So we've kind of seen everything, and I think it
became clear around twenty nineteen twenty twenty when we became
big that you know, the strategy of just doing our
business in Silicon Valley and ignoring Washington was not working
because our competitors, the big brokers and financial firms, were
(51:36):
very plugged into Washington. And so you know, this led
to politicians, lawmakers, regulators who were hearing from all these people,
just hearing negative things. And so we made a presence.
We started investing quite a bit. We have a big
office in DC, full office with you know, not just
(51:57):
government affairs and legal but actually engineering security, you know,
a lot lots of people.
Speaker 5 (52:03):
It helps.
Speaker 6 (52:03):
I also grew up in the area. I was sort
of a DC local, so I felt at least I
knew where to go, you know, when when when when
when I'm in the car working my way over to Congress.
But yeah, it's it's always been. We've tried to go
on both sides. We Republicans have historically been more receptive, right,
(52:30):
I mean, I've been to the White House at least
five times this year, and I was not invited once
during the Biden administration, despite the fact that we're a big,
big financial company, you know, leading retail trading. So certainly
we appreciate that this this administration has been willing to
engage and actually make America the the center for financial services.
(52:54):
And they have great initiatives like the Trump Accounts, which
are encouraging equity ownership, which were very aligned with. So
because they've been so willing to engage in lead, we've
been more and more involved, and we see it as
an opportunity to further our mission. But it doesn't mean that,
you know, we're not engaging with the Democrats as well,
because some of the Democrats are also like less on
(53:18):
the hyper progressive socialist side and more middle of the road,
and you know, they want the US to also be
number one and in business and financial services, and so yeah,
we've continued to engage on both sides. And the thing
you referred to earlier was, yeah, I got a burner
(53:40):
phone sent to me by by Governor Gavin Newsome. And
I was on a trip and I come back and
you know, my team tells me Gavin Newsom sent you
a flip phone, and like, what do you mean the
Gavin Newsom, the governor, and I'm based in Menlo Park, California.
They said, yes, you know, we checked with his team.
Speaker 5 (54:00):
It's real.
Speaker 6 (54:01):
Everyone thought it was a little bit strange, but okay.
And I opened up the phone and it's Gavin Newsome's
number in there, and of course I call it immediately, Gavin.
Gavin Newsom picks up and like, Governor, it's me vlat Tenev,
I got your phone.
Speaker 5 (54:20):
Thank you. It's very nice.
Speaker 6 (54:22):
And you know, to his credit, he said, look, there's
a perception that the state of California and me personally
or against entrepreneurship. We don't want we're an inhospitable place
for you to build companies. I want you to know that,
you know you can call me at any time, and
anytime you have a problem or you want to talk
about how we can improve the state and make it
(54:43):
a better place to do business.
Speaker 5 (54:45):
I'll pick up the call.
Speaker 6 (54:46):
And other people got this phone too, so it wasn't
just me.
Speaker 2 (54:50):
It was like a marketing strategy because he could have
just gave you his number.
Speaker 5 (54:53):
That's true, Yeah.
Speaker 2 (54:57):
Can you only call Can you only call him from
that phone?
Speaker 5 (55:00):
I haven't tried. I've only tried calling them from.
Speaker 4 (55:02):
That point immediately, Laura, let's get on this.
Speaker 6 (55:05):
But I appreciated the gesture, So, I mean, it just
shows you that I think that there are democrats that
are open to engaging with business and like what we're
doing as well.
Speaker 5 (55:15):
And I think that, yeah, I.
Speaker 6 (55:19):
Mean, we're obviously happy to engage with anyone on both
sides to further the mission of making everyone owners of
this great American industry. But of course I do appreciate
what this current administration is doing. They've been doing really
good things in general. I think they're getting some of
the important things right, and the invest America Trump Accounts
(55:42):
initiative in particular, I think can change the world if
implemented correctly. So with that one, I'm very excited. And
of course I've told the President and the Treasury who's
overseeing it, that whatever we can do to make sure
it goes smoothly, it's high quality. People actually use the account, Senate,
it's not just buried somewhere.
Speaker 5 (56:02):
Inaccessible, and explain that what that is.
Speaker 2 (56:05):
Yeah.
Speaker 6 (56:05):
So there's an initiative that passed as part of the
Budget Reconciliation bill earlier this year that'll give each child
born in this country an investment account with one thousand
dollars funded by Treasury, invested into a diversified portfolio of
think like S and P five hundred. Yeah, and you know,
it would just be passive. The investments would go in,
(56:28):
it would grow, and you know, when the child hits
eighteen and eventually and then thirty five, there's hurdles where
they assume greater control over that portfolio. But Michael Dell
and his wife Susan donated I think about six and
a half billion to increase to give two hundred and
(56:49):
fifty dollars to not just newborns, but backdated.
Speaker 5 (56:53):
Everybody under ten years.
Speaker 6 (56:57):
And I think you're going to see more and more
companies do interesting things. So one of the areas of
focus has been how do we make it as easy
as possible for money to flow into these accounts from
your family, from corporates and employers, from you know, your
church or other religious organizations. How can we make this
sort of like a multi generational giving platform that makes
(57:20):
it as easy as possible to actually give money from
us to the next generation. And to me, it's very
powerful because in so many of the other things that
we do, we're sort of like taking money from the
future and spending it now, Like the national debt and
big deficits are a form of that social security. There's
(57:40):
also an element of that, like we're funding folks now
and the debt is going to have to be paid
for in the future, so I like to counteract that.
The fact that this counteracts that, I think is very powerful.
Speaker 1 (57:53):
Yeah, and parents can put money into that account, and
it's just the idea of compound and interest over time, Right,
somebody gets that when they're born. By the time they're eighteen,
it reaches a certain amount. Obviously, if you put more
into it, there'll be more. Whereas when we started the
conversation almost it was like, what happens to the kid
who's graduating high school in twenty years and now can't
(58:14):
find a job or maybe college is not affordable.
Speaker 4 (58:16):
That accountant is at least there for them to pursue
other things. Entrepreneurship is one of those things that she
was talking about.
Speaker 6 (58:21):
Yeah, absolutely, this is like a good foundation for you know,
not just sort of a nest egg for the future financially, Yeah,
but also I think it it gives people skin in
the game. For American industries, like the biggest American companies,
(58:41):
you'll sort of like make sure that, you know, young
people feel like they have some ownership, some skin in
the game. You know, they'll be less likely to want
to burn the system down if they actually have some
skin in the game and are incentive to protect it,
which I think I think is a good thing because
so many young people feel like they don't have skin
in the game, and like, well, if if the American
(59:05):
government or the financial markets aren't working for me, what's
my incentive to you know, be in a supporter of
free markets and ownership. And I think giving people that
ownership is. Yeah, it is much much stronger. It's like
when you own a piece of land or a house,
(59:26):
you keep it in better condition. If you're just sort
of like a visitor or even renting, you know, I
don't care about it as much.
Speaker 1 (59:32):
My final question is this is probably my favorite quote
of yours this year. It was in a journal over
the weekend and they were talking about how you used
to drive a modest Tesla car. Yes, and then the
next quota says, why do I care about what other
people perceive of the CEO of Rabin. We were talking
about watches before it and the piece that talks about
(59:54):
how you're collecting.
Speaker 5 (59:57):
Cars.
Speaker 4 (59:57):
At this point, when.
Speaker 6 (59:58):
Do we should acknowledge that you guys are wearing some
very nice watches, as am I a Robinhood Court special here?
Speaker 2 (01:00:05):
Everything earned one is that one of one?
Speaker 6 (01:00:07):
No, no, no, we are we're testing it. We're testing
it for broader distribution. So maybe at some point you'll
be wearing these two.
Speaker 4 (01:00:16):
Maybe you'll see us in that well.
Speaker 1 (01:00:17):
Yeah, I just want to know, at what point during
this past five ten years did you get to the
reckoning of, like, you know what, I'm living life on
my terms.
Speaker 6 (01:00:28):
I think it was probably either Yeah, probably end of
somewhere between the end of twenty twenty two and the
end of twenty twenty three. Yeah, when things were actually
quite negative in Robinhood. And I think that that quote
(01:00:51):
was taken a little bit out of context or I mean,
I definitely said it, But what I was trying to
communicate is that, you know, a lot of times, as
a CEO or just as a human being, you're kind
of pressured to do things a certain way based on appearances,
(01:01:13):
how other people will will perceive them. Other people want things,
so maybe I should like support them publicly. And I
think there was a general shift of let me just
think about what I think is right and what I
want and communicate that rather than trying to like do
things or communicate things just because I think that's what
(01:01:33):
other people want to see. So I think authenticity in
a nutshell is actually important. I think I've gone back
and forth on this. I didn't want the outcome to
be I really like nice things. Yeah, because I'm actually
back to driving the Tesla and wearing the Court's watches.
(01:01:56):
So yeah, it wasn't It wasn't as much of a
statement about luxury and spending money, but more that, I
think authenticity is important. And if you find yourself doing
something just because it's the conventional wisdom and it's not
making you happy, then you're probably doing the wrong thing.
Speaker 2 (01:02:16):
Well glad, thank you for your time. Appreciate it.
Speaker 5 (01:02:19):
Thank you always pleasure.
Speaker 4 (01:02:21):
Appreciate you having us man, Thank you you have it? Erners,
what's up?
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Speaker 2 (00:51):
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Speaker 1 (00:57):
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Thank you isn't it a country issue? Is not an American issue,
It's a world issue.
Speaker 2 (01:19):
You came to earn Lisa.
Speaker 3 (01:28):
All Right, guys, welcome back special episode. We are on
site at Robin Hood's New York office. Absolutely, Norah, glad.
Thanks for the hospitality and the whole team.
Speaker 5 (01:37):
We greatly appreciate us. Yeah, yeah, always.
Speaker 1 (01:40):
You have become a regular audience and we're very appreciative
of always getting the invite to sit down.
Speaker 6 (01:45):
Well, you guys have seen our trajectory from I think
the first time I was on your show, we were
sort of in a relatively low point in our journey.
Than each time I think it's it's better and better.
Speaker 4 (01:59):
So yeah, I'm thankful to you guys.
Speaker 1 (02:01):
I'm glad you noticed the theme every time you come
on is we just keep moving up.
Speaker 2 (02:05):
Keep going up? Yeah, keep going up.
Speaker 3 (02:07):
So flat Tenef, thank you for joining the CEO of
Robin Hood and we have a lot to talk about,
but congratulations and events for everything that you guys have
been doing over the last year has been astonishing.
Speaker 6 (02:17):
There's much much more to do. I'm always looking forward.
Speaker 5 (02:20):
Yeah.
Speaker 6 (02:21):
We are in no way, shape or form done with
our mission, so plenty more to do.
Speaker 1 (02:27):
I think when we look at twenty twenty five and
it's totality, obviously the stock has tripled, You've been added
to the S and P. What is one of the
most proudant moments this year? So that has happened.
Speaker 5 (02:39):
I think that.
Speaker 6 (02:41):
My proudest moment was it was right before Hood Summit,
which was our Active Trader event. Everyone was sort of
like we'd been working hard all year, right, and it's
not just the things you mentioned, but we've done so
many product events. We started with our Gold event, the
Lost City of Gold, where we launched a new digital
(03:03):
advisory service and Robinhood Banking, and also Cortex, which is
our AI model, so that the year started off with
a bang. Prediction markets became a big thing. We've been
spending a lot of time working on that. We have
our Active Trader event, we launched tokenization in Europe, which
in the French Riviera, where I wore a very nice
(03:25):
white pinstripe suit, and then we went to our Active
Trader event in a few weeks before. We were in
a meeting with the senior team and I said, you
know what, guys, we've been making such good progress in AI.
We haven't really shared it with the world. We've also
been making a ton of progress with Prediction Markets that
we've never really talked publicly in event for him about
(03:47):
I know everyone's working hard about Hood Summit, but why
don't we do another event too in the middle of December,
and that became Robinhood Yes No, which is happening on
December sixteenth, Prediction Markets and AI And basically I survived
that meeting and everyone was actually excited about about launching
(04:10):
new products right at the end of the year. So
I think the culture of the company is at a
point where we move fast, we do it safely, and
we've just been like shipping great product at a velocity
that makes me proud. So I think I think that's
the biggest thing from the year that that I'm proud
of and thankful for.
Speaker 3 (04:32):
So yeah, so Choice said, the stock is up two
hundred and sixty three percent over the last fifty two weeks.
So what did what did? What did Wall Street get
wrong about rob Hunt? Cause, like you said, when we
first met, it was a it was a it was
kind of a rough patch that you guys were going through,
and a lot of people kind of counted you guys out,
especially from a Stock standpoint, but just stock has rallied
(04:52):
and has been, you know, a huge success for the shareholders.
So what do you think you guys did right? And
and the people that bet against you, what did they
have wrong?
Speaker 6 (05:05):
The number one thing is probably product velocity, being able
to ship so many products at high quality quickly, at scale,
and when you couple that with a large, already engaged
customer base, we can distribute the product very effectively to
customers and that's led to increase in revenues. So we've
(05:29):
been able to increase revenues and actually the growth rate
of revenues has been quite high year over year while
simultaneously improving margins. I think that's a rare combination. There's
this financial metric called rule of forty that maybe you
guys are familiar with. Sometimes people compare companies on this metric,
(05:51):
and basically you add your revenue growth rate to your margins,
and if the number is greater than forty, that's sort
of like a good target. So revenue growth rate plus margins.
And the argument there is you can be growing fast
and have low margins and that's okay. That's like a
(06:13):
considered a good investment, or you could be growing more slowly,
but if your margins are good, then that compensates for it.
And I think our last rule of forty print was
over one hundred. So if you plot all the companies
in SEP. Five hundred across, this metric robin is just
a huge outlier. And it's because we've been able to
(06:33):
grow very quickly while also improving margins at the same time,
and I think that's a rare combination for public company.
Speaker 1 (06:43):
When we first met, it was just before the idea
of the meme stock, which obviously your platform got a
lot of flat four and it was, Oh, the retail
traders don't know what they're doing. And then we saw
you speak and we met again, and was the idea
of like, the retail trader is the sophisticated trader. Yeah,
(07:03):
talk about the role and how that's transpired over the
past two or three years to now that everybody's in
on it, Like way the retail is where we can
get a lot of our customer based from because they
have the tools.
Speaker 6 (07:16):
I think companies are waking up to this. You know,
we were relatively early to embrace the retail trader because
the retail trader is our customer. So of course we
have a natural incentive as a company to have our
customers be shareholders, right because not only are they are shareholders,
(07:39):
but they're people that use the product every day. You know,
our product is a stock market investing product at its core,
and one of the things that I'm very proud of
is the work that we've done on IPO access. I
mentioned you guys a little earlier. It is my second
trip to New York this week. First time I was
at the New York Stock Exchange on Tuesday at a
(08:01):
round table called make IPOs Great Again.
Speaker 5 (08:04):
It's funny name.
Speaker 6 (08:05):
They had the red hats too, which, by the way,
the idea that the administration and the regulators are coming
to Robinhood as a representative of the retail investor to
collect feedback for how to make capital markets and IPOs
better was something that probably I wouldn't have imagined the
(08:26):
first time we met in twenty twenty two. So pretty
crazy how quickly things can change. But when we went
public in twenty one, we rolled out this product called
IPO Access, and the idea was not just have IPOs
be for the chosen few, the elites, the high net worth,
the private wealth folks, and obviously the institutions. But how
(08:47):
do we plug robinhood investors directly into IPOs and get
them allocations at the same price on a level playing
field with the institutions. And so our IPO at the
time was I think the largest IPO retail allocation for
an IPO of its size, and we tried to get
(09:07):
other companies on board. We got some, but they were
very skeptical and reluctant. You know, some people actually, to
be fair, really bought into it, but most companies we
had to ask for favors, and you know, they would
throw us a few scraps, like we'll give you half
a percent of the IPO allocation. So we really asked
for favors and people didn't really get it.
Speaker 5 (09:29):
They're like, what's the point.
Speaker 6 (09:30):
I'm just trying to take my company public, go through
the process, get it over with so I can get
back to running my business. They didn't really see the point.
And fast forward to twenty twenty five this year, when
the IPOs have come back, every company of consequence has
basically come to us and asked, let's talk about our
retail strategy. How do we get retail more engaged. And
(09:52):
you started to see the CEOs of those companies when
they're doing their press about the IPO, talking about how
retail's big concent tituency and saying, you know, in the
case of Bullish CEO, we give retail twenty percent allocation.
It's one of the largest retail allocations ever. Gemini CEO,
the Winklevost Winds gave a huge retail allocation and you know,
(10:15):
now it's it's completely shifted where retail is definitely being
a first class citizen. So what we're trying to do
is push that forward, go deeper into IPOs and continue
the leadership we have there. Post IPO. We want to
make the brand of being a public company a little
bit better. I don't know if you guys have I'm
(10:36):
sure you talk to a lot of entrepreneurs, some of
whom are public. Generally, the perception and the way they
talk about being public is negative. We have to be public,
but I hate earnings calls.
Speaker 5 (10:47):
I hate this.
Speaker 6 (10:48):
I hate that it's a chore. And what I'm trying
to do is shift it into being a positive thing.
So rather than thinking of your earnings calls as a chore,
how can they become fun? Can you as the executive
have fun during earnings and also can the audience actually
enjoy watching it. So we've been investing a lot in
actually making our earnings calls not just informative, but entertaining.
(11:12):
So for the last one, we did it at the
Chase Center, home of the World to State Warriors, and
we not only had the cell side analysts, who's the
typical earnings audience, but we had buyside investors. We also
had the media, so the media was at our earnings
calls and everyone could ask questions on a level playing field.
Speaker 5 (11:33):
We had retail investors via.
Speaker 6 (11:35):
Zoom asking questions, and then of course the whole thing
was televised, so it was on live stream on social media.
And you know, go back a year ago, our earnings
calls were on a polycom audio only. We had maybe
like hundreds of people listening, and now it's gone to
tens of thousands, so orders of magnitude increase in the
(11:57):
audience for earnings. And now we're starting to actually export
this as a product to other public companies. So Open Door,
for example, they saw what we were doing, they said,
we want to engage retail. We want retail to be
our number one constituency, so we work with them to
live stream their earnings to our audience in the Robinhood
app and we've heard from many people that they'd like
(12:21):
to start doing this. So I think you'll see earnings
calls becoming fun and I think the brand of being
a public company start to shift into a more positive thing.
And also on the other side of the spectrum before
a company is going public, when they're still private, we're
hard at work trying to get retail exposure on the
private side and making that a little bit easier. We
(12:42):
have a great initiative called Robinhood Ventures, which is going
to be in the US, and we're launching a closed
then fund that's on file with the SEC right now,
so we're actually in the quiet period. I can't talk
much about it, but the ideas make it so that
retail investors can invest in the best private companies before
they go public. So we're kind of tackling it across
(13:06):
every part of the spectrum.
Speaker 3 (13:08):
Yeah, talk about just from a retail standpoint, how that's changed,
and you guys played a major part in that. Retail
investors used to be called dumb money. Yeah, not really
taken seriously because they were not educated. But now they
have a higher level of education platforms like ourselves and
your platform, and they're more respected. But there's also more
(13:29):
risks because they're taking more risks now too, right Like
they're they're doing things that a lot of people didn't
even think about doing before, as far as options and
futures and you know, leveraging different things in that nature.
So what is your thoughts on the state of a
retail investor in twenty twenty five and what are some
opportunities and what is some dangers that they need to
(13:51):
be aware of.
Speaker 6 (13:52):
I think that retail investors. I think retail investors being
a bigger chunk of the markets is a very good
thing for companies because you notice a lot of times
there's some macro event like we saw it this year
with the tariffs. We saw a couple of weeks ago
(14:17):
with the sort of like FED decision in December, is
the Fed going to cut maybe they'll refrain from cutting,
And that affects the markets. And it's because institutional investors
tend to like make broad portfolio moves without really looking
(14:37):
deeply at each individual company. It's sort of like I'm
risk off. I'm going to reallocate for my stocks to
fixed income or move to cash. Retail investors tend to
invest directly in companies, and they make their buy and
sell decisions based on the company doing well. So, for example,
when the tariffs hit, you know, so you saw a
(14:57):
lot of growth companies that probably weren't directly affected by
tariffs hit rather hard by that, right, and retail investors
looking at this and saying, why this company just go
down forty percent doesn't make any sense. Tariffs have nothing
to do with it. It's just because hedge funds are
(15:18):
selling everything, right, So then they bought it and they
became net buyers, and then they became rewarded for it.
So I think the more retail investors come to the market,
the less this like indexing thing is going to lead
to price dislocations. I think the more signal you'll get
of people buying companies because they actually want to invest
(15:38):
in that specific company. And I think also retail investors
are smart, and what's really attractive about companies is they're
not only smart and doing like careful analysis and posting
it on social media, but when they become investors, they
become kind of defenders and fans of the company. I
(15:58):
think one problem you're seeing with the AI companies right
now is AI technology is very popular. People are adopting it,
but the AI companies themselves are very unpopular. They don't
have that many fans. If you see criticism about you know,
say Open Ai or Anthropic, the people rushing to defend
them are either venture capitalists online or you know AI
(16:22):
researchers that work at these companies. But you compare that
to crypto. You know, if the crypto industry is under
threat from you know, regulatory overreach, or even if just
someone says something negative about bitcoin, you just have an
army of retail people that just take the knives out.
(16:44):
And you know, people are nervous to say anything negative
about bitcoin now. And I think it's because the one
thing crypto got very very right from a very early point,
I mean from basically the genesis of it is making
it so that normal people can have crypto. And then
you see everyone's invested in crypto. You know, you've got
tens of millions of people in this country, so they're
(17:04):
going to defend it because they own it. And I
think AI doesn't have that property. The big private companies
are held by wealthy insiders, so they don't have as
many defenders, and I think that could become a big
problem for them, because you know, if it starts taking
more jobs or at least disrupting the labor force at
an accelerated rate, I think people are going to get
(17:26):
angrier and angrier. I think what's going to happen is
if regulations come, they're not going to have people fighting.
The everyday person might not be on the side of
the big AI companies. I think that's a threat to
the technology.
Speaker 1 (17:39):
Yeah, there's some talk from a lot of leaders in
AI about the regulatory environment and how if it gets
too stringent, it will be full behind. Obviously, I'm sure
you're part of some of these conversations from a broker standpoint,
but also from the cryptal standpoint. How do you see
it in terms of this race in AI.
Speaker 6 (17:58):
Yeah, it's interesting to me to compare how much regulation
is in financial services, you know, quite a bit highly regulated,
compared to what we've seen with AI, which is actually
very little, like it's mostly been allowed to go in
and disrupt and and you know, it's hard to say
(18:21):
that that's been wrong because thus far, I think that
the effects have been largely positive from my standpoint. I mean,
you're seeing increases in productivity largely. It hasn't displaced too
much labor participation. But you know, the models are getting
(18:42):
better and better, and I think we've gone from just
summarizing information that's already out there to creating new knowledge.
And you know, the knowledge is maybe small bits and
chunks here and there, but you can imagine as they
get better, you know, the knowledge being created and the
discoveries being made, and maybe new inventions will come that
are more and more complicated. So then it starts to
(19:04):
get scary and you start thinking about, you know, how
big is the disruption? How do we mitigate the negative effects?
And I think the best way is to make sure
people are invested in it. Yeah, so that you know,
at least you own the thing that's disrupting. You're you're
always you're always going to be in better shape if
you have some a stake in the agent of disruption.
Speaker 2 (19:24):
Yeah.
Speaker 1 (19:25):
I just a follow up because I asked that because
I watched your clip where you talked about your belief
in artificial intelligence on the record, saying that it's going
to create a new world order, diminishing people's chances to
earn income from labor, and fueling participation in markets and
trading on brokerage apps. And when you said it, I
was like, this is what we've been saying all along.
You have to invest. It's the only way probably going
(19:46):
to do it. Speaking to that audience now of who's
going to be interrupted and disrupted, knowing that your brokerage
has a youth movement, it just feels like those things aligned.
How are you viewing it in the terms the future,
in terms of the disruption and investing.
Speaker 6 (20:02):
Yeah, I mean I think that when I talk to people,
it sort of like breaks down by age a little bit.
So for older folks such as myself, I don't think
they're worried that much. They're like, oh, well, you know,
we're going to retire soon, and not exactly for me,
I'm not going to retire soon.
Speaker 5 (20:22):
But you know, if you're in a certain.
Speaker 6 (20:23):
Age, you're already mid career or a late career, you
probably don't care as much. Young people in their twenties
and thirties going to two buckets. Some are like Super
Bowl and they're like, I'm going to use AI to
build a company. Very entrepreneurial people who are very excited
about this, but yeah, there's you know, folks in their
twenties that are maybe a little bit less entrepreneurial that
(20:44):
we're sort of like planning on a stable career path,
and they're very nervous. They don't know if that job
that they were maybe going to college to get is
going to be around in ten years, and there's a
lot of uncertainty. I think there will be job disruption.
I think certain categories are easier to product predict than others,
(21:05):
Like it probably wouldn't want to go into telemarketing right
now as a as a profession, for example. But I
also think there's going to be new jobs that are
that are created and new job categories. And I mean,
for example, your guys' job, like a influencer and content creator.
It's very hard for people to be influencers and content
(21:27):
creators even ten years ago. Right this is like a
new thing. So I think you'll get a bunch of
new things like that. And I think the field that
you guys are in is are going to continue to grow.
There's going to be more people that are that are
going into that path, so not all is lost, and
I think the jobs of the future will tend to
(21:48):
look like leisure to us.
Speaker 5 (21:52):
Yeah.
Speaker 6 (21:52):
I mean, you imagine fifty years ago, like our grandparents
in the workforce working at a big company, or maybe
one hundred years ago if they're working in a factory
or something like that. Looking at what we're doing today.
You guys are recording shows. I'm at a computer typing.
You know, probably wouldn't have looked like real work. They'd
(22:12):
be like, oh, these guys are just horsing around. You know,
why aren't they picking up tools and building stuff?
Speaker 5 (22:19):
You know.
Speaker 6 (22:19):
But you know, we take our jobs very, very seriously,
and I think we'll probably have that same view of
people two generations from now.
Speaker 3 (22:28):
So you're not you're not worried about like doomsday scenario
when it comes to AI.
Speaker 6 (22:32):
I think that we'll be able to manage it. Yeah,
I'm very I'm very optimistic. I mean, I don't think that.
I think a lot of people feared about a fast takeoff.
And you know when you guys saw GPT four came
out and it was like a big change qualitatively over
GP three T three point five, the original Chad GPT.
(22:55):
Now we're on you know, GPT five, Gemini three. These
models are good, but it's not like each one getting
ten times better than the last. And there was this
report twenty It was called like AI twenty twenty seven
by an AI researcher. Maybe you guys have read this,
and you know recently they updated and they're like, Okay,
(23:15):
we thought everything would happen by twenty twenty seven. It's
going a little bit slower than we imagine. We're revising
it to twenty thirty. So AI researchers call that a
slow takeoff scenario, and a slow takeoff is sort of
good because that means we'll have more time than we
thought to adapt and actually, you know, make changes. So
(23:37):
I think we'll get there. I think initiatives like getting
more people in the markets, making sure the young people
and the babies have brokerage accounts from birth through the
Invest America initiative will get us there. I think there'll
be more entrepreneurship, and probably that entrepreneurship will look like
leisure to us today, which also is a good thing.
Speaker 3 (24:00):
Where do you see crypto going, because obviously that's the
major staple in what you guys have built with Robinhood
in twenty twenty five, let's say twenty thirty five, right, Yeah,
where do you see crypto going and bigcoin specifically.
Speaker 6 (24:15):
Yeah, I think the biggest needle mover for crypto is
that it's going to help take the great things we
built in the US and make them increasingly global and
available to investors all around the world, some of which
haven't had access to these tools, because I think we
(24:36):
kind of take it for granted here that we have
the US dollar, we have access to US stocks, we
have really high quality assets. When Robinhood gets our private initiatives,
we'll be able to distribute access to private companies, so
we have really good investments and ways to allocate your capital.
If you're in Venezuela, you don't have access to those things.
(24:57):
And that's actually why stable coins have been soapower popular,
because you know, a lot of these people are in
countries that have unstable governments, unstable central banks. If they
do have central banks at all, they don't have functional
banking systems. Currencies are devaluing, and they're just adding zeros
and zeros to them. The bills are worthless. So stable
(25:20):
coins really became popular as a way to store your
wealth in US dollars, because you know, the crypto companies
actually went in and built local rails connecting to all
of these markets, so they've been plugged into the crypto system.
And I think crypto will evolve with tokenization to make
(25:43):
it easy to distribute US stocks and other investments overseas
as easily as stable coins have done it to dollars.
So I think that's the future. Crypto will sort of
like the technology will help stitch together all of the
markets that make it so that everyone is on a
level playing field, uh outside the US as we are
(26:03):
in here. That's at least the future that we're we're
working to build.
Speaker 3 (26:07):
So you believe in o ecosystem, not just bitcoin. Not
a bitcoin maxie.
Speaker 5 (26:10):
I'm not a bitcoin maxie.
Speaker 6 (26:12):
Yeah, I mean I'm a bitcoin fan, and I think
bitcoin uh has an inherent advantage. Price prediction, Oh, price
predictions are tough. I would tell you, I'm pretty I'm
pretty bull And if you told me at the beginning
of the year that there would be like a National
(26:34):
Bitcoin Strategic Reserve and all of these dats and we
would still be sitting here basically flat for the year,
maybe a little bit up, I'd be, I'd be surprised.
It's got a lot going for it. It's a singular asset, right,
it'll it'll always be the first.
Speaker 5 (26:50):
So I think.
Speaker 6 (26:50):
I think it's got a bit of a religion around
it with the bitcoin maxis and and that's hard to
fight relative to the other coins.
Speaker 1 (26:58):
Yeah, I think obviously, if you look at the correlation
between the rise of bitcoin getting up to one hundred
and twenty six thousand, you watch your stock also get
towards all time high around the same time. People feel
like there's a correlation there, but there's also a piece
that has helped the stock, and that's the predictive markets.
So not only could you invest in bitcoin, but you
could say, hey, I see it getting to one hundred
(27:20):
thousand by December thirty. First, talk about the role that
predictive markets is played, because we talked about it like
you were thinking about it. We were talking about probably
market the last time we met in Miami, and now
predictive markets are a thing, a real thing that I
feel like you guys have adopted right away. Some of
the other people in the space haven't, and they're looking
at you guys like this is a leader.
Speaker 4 (27:41):
Do we need to add this. This is going to
be disruptive.
Speaker 6 (27:44):
Yeah, absolutely, And it's kind of a fun position for
me to be in because typically when you look at
crypto and all the other products we've added, I mean,
stock's probably the best example. We were like years after
the leaders, right, I mean stocks went electronic in the eighties.
Basically e trade got started. The idea was to trade
(28:06):
stocks on the Apple macintosh. Apple Macintosh had come out,
and these two guys got together in Palo Alto, California,
and we're like, what if we use the Apple macintosh
to trade stocks? And I think that was in nineteen
eighty two, which is pretty crazy. So we were multiple
decades late to the game for electronic trading in stocks.
(28:28):
Crypto started in two thousand and nine. We added crypto
to the platform in twenty seventeen. Actually, yeah, twenty eighteen
was when you could start trading it. So typically we've
had an approach where we come in after there's like
clarity that it's a real thing that people want, and
then we just bring our scale, lower costs, and you know,
(28:51):
better ux to the product. So Prediction Markets is a
new one for us because we were kind of out
in front and then it's sort of like how do
we maintain our lead and market position, and you know,
when we have a bunch of people coming after us.
It has surprised me that, you know, you have the
exchanges like like Polly and Calshi, who have obviously been
(29:11):
there from the beginning, but like no other broker has
has gotten into it yet, no other broker of significant consequence.
And I think they're coming like they're seeing what we're
doing and they see that it's resonating with traders and
and just with mass market retail. But yeah, I think
(29:32):
we're also moving and we're adding new innovations. I think
the event that we're gonna we're gonna unveil on the
sixteenth is is going to show some new things to
people that they haven't seen before. And it's the fastest
growing business that Robin Hood's had. You know, in the
past year, we've gone from one single contract, which is
the presidential election, to over fifteen hundred. We've gone from
(29:58):
it's basically the volume is doubled. Quarter over quarter. Q
three had I want to say, two point two million contracts,
but then October had two point five million, so more
than Q three put together and then you had November.
We announced the November numbers, three billion contracts traded in November,
(30:20):
which is yeah, it's a thirty million revenue in a month,
so three hundred and sixty million run rate if you
take the November numbers, which is a big ramp, and
I think, you know, it's just been really resonating with
the traders.
Speaker 2 (30:40):
And sports betty.
Speaker 6 (30:42):
Sport's a big part of it, but the big part
of what we're doing is also diversifying the contracts. So
it used to be just elections and elections I think
to me is probably the most interesting. Then we added
sports and we've added a ton of leagues. There what's
betting or like, what is it exactly? I liked most
(31:05):
people I took to call it wagering.
Speaker 2 (31:08):
Wagering, Okay, I like the language there.
Speaker 6 (31:12):
I think it's different in all seriousness to sports betting,
and a lot of people ask about, you know, how
is it different from a regulatory standpoint, from a product standpoint.
I think it's significantly different. And I haven't really done
much sports betting, but what people love about it is
you can actually trade these contracts during the game, so
(31:37):
you know, the because it's a it's a two sided market.
The exchanges run the contracts while the games are happening,
and that's when the information is coming in. I mean,
for example, you can see how each play changes, changes
the odds and the outcomes, and you can go in
and out of the positions, and a lot of the
(31:59):
market part pints that are coming in both from the
market maker side and sort of like on the trading side,
are the same market participants that have been trading futures
and equities. So I think it's disruptive to sports betting,
but I see it as a fundamentally different animal and
a better product, which is why I think all the
(32:20):
traditional sports betting sites are so nervous about it, and
they're just sort of like, uh yeah, they see the
writing on the wall, and they're they're working as hard
as possible to figure out their prediction market strategy, and
some of them are outright pivoting to prediction markets completely.
Speaker 1 (32:39):
As soon as you said the November's numbers went up,
I automatically thought NFL and its height constable, and it's height,
but it's not just sports and NBA.
Speaker 4 (32:45):
NBA is and it's kicking off. World Series is just
about the end.
Speaker 5 (32:49):
Well, and we have you.
Speaker 6 (32:50):
I think we mentioned this earlier AI model contracts, which
you know is a space I feel like I have
some understanding of. And you have traders that are specialized
in very specific areas. And you know, like four months
ago it was I think thirty five percent chance that
Gemini would have the best model by the end of
(33:13):
the year. Chad Gpt started the year ahead.
Speaker 5 (33:16):
Right, and you know, if you really.
Speaker 6 (33:21):
For folks that really kind of understood what was happening
in the AI world, it seemed like conventional wisdom was wrong.
Speaker 5 (33:27):
Right.
Speaker 6 (33:27):
You have Google, who's on a steep trajectory, and they
have all the data, all the compute, they're highly motivated.
I think now we look at the Gemini release and
it's like, well, it's so obvious they had all these tools.
But back then, I think conventional wisdom was wrong. So
I think for a trader, it's going to open up
more possibilities, and you know, you can specialize in things
(33:50):
because there's probably at least one topic that each person
understands better than the average conventional wisdom. So I think
it'll pull in more traders. But I think the most
interesting thing for me is that it creates a new
source of information. It's almost like the new media or
new news, or instead of watching talking heads pontificating about
(34:11):
what's going to happen, you can just look at the
market and then you'll learn a little bit about what's
likely or what's even what's even true in this world?
Speaker 3 (34:20):
Do you have any reservations about this, because it's like
young people now are they're betting on sports more than
they open in Brogridge accounts. So we know that gambling
has been long history in America, but most of the
time people that gamble lose money, right, So that's boys
been a thing of like, well, what's the difference between
gambling and investing for a long time you can say, well,
(34:40):
investing is a game of knowledge and gambling is a
game of chance. Right, Like you invest in the s
and P five hundred, you hold it, you're going to
make money. Vegas is a fifty to fifty chance. But
now essentially the worlds are colliding and investing is kind
of turning into gambling like prediction markets. Right, it's kind
of like a form. It's a form of gambling and
a more sophistic decated way.
Speaker 2 (35:00):
Right.
Speaker 3 (35:01):
So even with the political thing. I mean, we see
what happens in sports betting. People bet a lot of
money on sports. They're going to do things to determine
that their team is going to win, which leads to corruption,
which we see FBI have an investigation on the NBA. Now, yeah,
the same thing could happen in politics. If I bet
a million dollars that the Senator is going to win,
like you know, now you get into a very gray
(35:23):
area of very you know, kind of a dark, dark
pathway that could be followed. So I say that to say,
do you think that this is actually a form of
gambling and do you think that it is kind of
opening doorways to you know, a new way of people
(35:44):
just instant gratification gambling on everything in society.
Speaker 5 (35:49):
I think it's a little bit different.
Speaker 6 (35:52):
I mean, if you look at financial markets, there's been
there's been a lot of people think trading and gambling
are one and the same. I think it's a little
bit different, and I think every financial market has been
sort of like under this attack. When future trading first
(36:13):
rolled out to retail a few decades ago, you know,
a lot of people ask this question, why is a
retail investor speculating on the price of oil or corn.
They're certainly not hedging their corn exposure in any significant way.
And I think the answer is, in order for a
(36:33):
market to work, you need speculators. And then some people say, well,
you know, what's the difference between speculation and gambling. It's
kind of two words describing the same thing. You're making
a short term price prediction on what's going to happen,
and you know you're putting your money, putting money behind that.
And of course when you're putting money behind a short
(36:53):
term price prediction, there's risk involved. But I think we
need the speculators because without the speculators, the market isn't
effective for the hedgers, So every market requires speculation in
order in order to work. Now, I don't think everyone
should be speculating with all of their money, but I
(37:17):
think what we're seeing is people have different buckets. You know,
they have. Even the most active traders that we have
on the platform, those are the ones that tend to
be most likely to open up retirement accounts as well.
So you know, we do have people that are just
using Robinhood for trading, but if you take a typical
(37:40):
active trader, they tend to be the ones that use
us for all of their things, so that they'll have
a retirement account, they'll have, you know, a discretionary and
maybe they'll have a dividend portfolio. We rolled out a
nice feature called multiple brokerage Accounts, which actually lets you
put your money in different buckets. And you know that
increasingly we have bangs, So we've got there, you know,
(38:01):
checking and savings accounts with us. So what it looks
like is a trader comes in, maybe they come for
prediction markets increasingly, or crypto or stock and options trading,
and then they open up a bunch of accounts with us,
they use a lot of our products, and then all
of their ideally all of their money ends up at Robinhood.
(38:24):
But yeah, so in a hypothetical world where everyone was
just speculating one hundred percent of their money, I think
that would be not great for society. But that's that's
not what we're seeing. And in terms of what we
incentivize as a company, you know, the behavior that we incentivize,
we incentivize retirement. So a retirement account is the one
(38:45):
where rock bottom costs three percent match, so we actually
incentivize you to put to put money in and that's
been incredibly successful, over twenty five billion in assets, one
and a half million funded retirement accounts. I think among
the fastest growing, if not the singular fastest growing retirement
product of all time. So what we really want to
(39:07):
build is we want to be your financial super app.
We want to be your primary and your secondary financial account.
Speaker 5 (39:15):
So all of your.
Speaker 6 (39:16):
Activities should be should be done at Robinhood. And you
raise the integrity concern, Well, how do you know that
someone's not, you know, taking advantage of their inside information
to make money on these things? And I think this
is a criticism that you can levy on you know,
(39:38):
the conventional sports books as well, and they've gotten into
some heat for that, and they're saying, well, this is
why it has to be regulated by the States, because
we have all the machinery. Well, the financial markets have
been dealing with market integrity concerns for decades. Like you
can imagine, it's pretty analogous to a corporate insider or
(39:59):
someone that works at a company using information that they
have on a in on an upcoming product launch to
make money. And you know, we have robust safeguards in
the form of trade surveillance, monitoring, And it's actually one
of the benefits of doing this in a in a
(40:21):
regulatory environment that has all of that set up, rather
than you know, doing it offshore where all bets are
off no pun intended, and there's no control, so that
it's happening anyway people want to do it. It's like
a growing regulated market, and I think it's better to
have it in a place that has controls than the alternative.
Speaker 1 (40:44):
Is there a part of you in the team that says,
let's meet our customer base where they are or maybe
where our future customer base is. Right, if we know
that we've seen the spike of DraftKings, we've seen Flutter,
which obviously owns FanDuel.
Speaker 4 (40:58):
We've seen casino.
Speaker 1 (41:00):
Apps come and just take over, right even New York
haven't sports betting now what we've seen income If we
know that they're there, if we order for predictive markets,
is an opportunity to sees go from one spectrum to say, hey,
there's more things to offer outside of just the sports betting.
There are the retirement plans, there are broketure accounts that
you can open.
Speaker 4 (41:20):
Is part of it. Let's meet them where we're at.
Speaker 1 (41:22):
So we can convert them as well over to what
we have as a totality.
Speaker 5 (41:27):
I think that's a big part of it.
Speaker 6 (41:28):
I mean when I say we want to be your
primary and secondary financial account, what I really mean is
you should deposit your paycheck into robin Hood Banking. We
should be the place where you have your savings account,
your emergency fund, and you should of course have your
retirement and if you want passively managed investments, we've got
(41:50):
robbin Hood Strategies, which I think is far and away
the best digital advice product on the market that launched
earlier this year and rapidly went to.
Speaker 4 (41:59):
Over a build an educational standpoint.
Speaker 6 (42:02):
Well from educational standpoint for sure, but also just if
you want a money button where you just put money
in the account and it's invested for you reasonably at
the lowest possible costs, I don't think there's a better
digital advice product like robo advice is what it competes with.
And then of course your discretionary trading and investing. So yeah,
(42:26):
we think we can serve all of your dollars. Right,
your money should come into Robinhood and essentially we should
make it so that you never feel like you have
to transfer money out. And I think when we saw
the rise of sports betting, which happened with the deregulation
(42:47):
of gambling at the end of the last decade, you know,
and you see the articles where actually it's been growing
incredibly quickly. Young people especially are doing more of it.
I think we had a little bit of a choice
to make. You know, do we fight against this, you know,
do we go out and say, you know, we're against
it and people shouldn't be doing it, or do we actually, uh,
(43:12):
you know, take the stance that we think people should
be free to do whatever they want with their money,
of course, within reason, and we want to make it
a safe environment for them to do those things. And
I think the reality is there is a lot of ways,
there's a lot of ways out there that you could
(43:35):
not even invest. But also just like spend money frivolously.
I mean, we're just being bombarded with ads for buying
different things, and you know, not not even just money,
but time all these like digital video platforms that are
just engaging us and sucking up our time. So uh,
(43:57):
if you look at you know, the broader things that
are keeping you from doing good behaviors, there's a lot
of distractions out there, And I actually worry less broadly
about sports betting than you know, social media becoming super
addictive and just sucking up all of our free time
because time is also money. Right, You're spending four hours
a day on social media, that's that's that's time you
(44:21):
could be spending doing other things. So yeah, I think
I think that at the end of the day, you know,
people have to make their their own decisions for how
to spend their time and money, and we have to
do the best to help them do do things that
are good. But ultimately, you know, the the users in charge.
Speaker 3 (44:44):
Do you think that there's gonna be AI bubble? And
do you think that the economy as a whole is
headed in a negative dimension? A lot of people are
forecasting a recession. Some people think that we've been in
a recession. So what'sh your thoughts on a greater economy
going into next and a year after, and what's your
thoughts on so much talk about the AI bust happening?
Speaker 6 (45:07):
Yeah, I mean, to some degree, we're always in you know,
no new technology that's as popular as AI is just
a smooth up into the right right, people get excited
about things. There's corrections. You saw it with crypto, you
saw it with the Internet in the dot com. It's
(45:29):
a question of where we are in that cycle. And
my take is we're still rather early, Like we haven't
even seen AI I pos yet. Right, We've got two
companies that are really, really big AI native companies, in
Vidia and Google. You look at them from a fundamental standpoint,
I don't think their price earnings are completely out of
(45:51):
whack by historical measures. So yeah, near term, I would
say that public markets, they they don't seem overly like,
they don't seem like they're overvaluing what we're seeing in
(46:11):
AI yet.
Speaker 2 (46:12):
Uh.
Speaker 6 (46:13):
And I don't think a lot of the the AI
companies that are private h. I mean, you know, you
can you can debate how real the data center build
out is going to end up being. And I think
some of those things are rather complicated to to parse.
(46:34):
You know, the spend commitments with the chips, but if
you look at the fundamentals, people are buying chips. The
models are improving.
Speaker 1 (46:41):
Uh.
Speaker 6 (46:41):
The researchers say, you know, they don't see an end
to reinforcement learning and pre training seems intact. So the
models are continuing to get smarter, which makes me feel like,
at least in the near term, we're gonna we're gonna
keep seeing AI driving forward.
Speaker 4 (47:00):
Yeah.
Speaker 1 (47:01):
So we talked about predictive markets, but one of the
biggest revenue models for you guys lies in options trading. Yeah,
zero day trading, futures trading. With the new technology that
you guys launched last year. Talk about the impact that
it's had obviously on the company and where you're seeing
your retail investors. Are they staying, are you seeing more
(47:21):
people in those spaces?
Speaker 6 (47:23):
Yeah. Legend has been growing remarkably quickly. So Legend is
our desktop active trader platform, and you know, month over
month we're seeing we're seeing continued growth and acceleration there,
and it's sort of like activity we wouldn't have gotten otherwise.
(47:43):
So I think active traders before we rolled out Legend,
they were using our competitors because they need multiple screens,
they need, you know, to chart on the same page
as entering the order, so we weren't serving them optimally
on mobile. And these are our most engaged customers. Every
(48:03):
time I ask, you know, how can we make Legend
better on social media? I just get hundreds of comments
of all of the specific things they want us to improve.
So what gets me most excited is it's already quite big.
People are already quite happy, and I have just just
a endless list of more things that they want, and
(48:25):
I've got a great team on it that's like moving
really fast and super motivated. So I think that's going
to be a tailwind for the business. And we're doing
things on Legend that nobody else is doing, incorporating AI
tools to make it even more differentiated experience for our traders.
I think for an active trader, they should feel like
(48:46):
they're at a disadvantage using any other platform than Robinhood
and the couple other things we're doing. Besides the AI integrations,
we've added index options, which was a very common quest.
Index options they trade around the clock. It allows you
to hedge with the broad based market or index and
(49:09):
really quickly, we've just grown our market share there to
the point where you know, we're we're now among the
biggest players, if not the biggest option same story that's
been more steady. We were already quite big, but if
you look at the market share numbers, which which are public,
we're either number one.
Speaker 5 (49:28):
Or TI tied to number one every time number one.
Speaker 6 (49:31):
Yeah. So so we've been doing well. Yeah, and and
I think we're on a path, but yeah, there's more
to do. We're still under penetrated on web, where a
lot of the of the market is. So I see
Legend continuing to drive that. Our AI tools are still nascent.
I think those are going to get a lot better.
Speaker 5 (49:51):
And then you know, you.
Speaker 6 (49:53):
Could see actually prediction markets high overlap with our active traders.
You could see that becoming more integrated into Legend. It's
not even on Legend yet, and across all of our
other surfaces.
Speaker 3 (50:05):
So before we leave, I just wanted to ask you
a question about I know you and a lot of
other tech billionaires have spent a lot of time in DC. Yeah,
so I want to get your thoughts on on the
current administration, your conversations with the president and different initiatives.
And then I think you have another story to tell
about another politician that's been you a gift. Oh yes, yeah,
(50:25):
let's talk about politics. Le's talk about politics for a minute,
shall we.
Speaker 6 (50:28):
Let's do it. I mean, from from the very beginning,
I think Robin Hood has built ourselves up to be
and you could say at the beginning, it was inadvertent.
I think the philosophy of most Silicon Valley companies would
be stay out of politics, at least when we got
started in the middle of last decade, just build your
stuff and you know, probably ignore what's going on in Washington.
Speaker 1 (50:53):
Uh.
Speaker 6 (50:54):
And we started during the Obama administration, so we've gone
through Obama, Trump one, Biden and now. So we've had
a good mix of you know, first being ignored, then
having generally favorable conditions during Trump won, but maybe not
as favorable as now, and then the Biden administration, which
(51:14):
was just outright hostile to crypto and retail trading in general.
So we've kind of seen everything, and I think it
became clear around twenty nineteen twenty twenty when we became
big that you know, the strategy of just doing our
business in Silicon Valley and ignoring Washington was not working
because our competitors, the big brokers and financial firms, were
(51:36):
very plugged into Washington. And so you know, this led
to politicians, lawmakers, regulators who were hearing from all these people,
just hearing negative things. And so we made a presence.
We started investing quite a bit. We have a big
office in DC, full office with you know, not just
(51:57):
government affairs and legal but actually engineering security, you know,
a lot lots of people.
Speaker 5 (52:03):
It helps.
Speaker 6 (52:03):
I also grew up in the area. I was sort
of a DC local, so I felt at least I
knew where to go, you know, when when when when
when I'm in the car working my way over to Congress.
But yeah, it's it's always been. We've tried to go
on both sides. We Republicans have historically been more receptive, right,
(52:30):
I mean, I've been to the White House at least
five times this year, and I was not invited once
during the Biden administration, despite the fact that we're a big,
big financial company, you know, leading retail trading. So certainly
we appreciate that this this administration has been willing to
engage and actually make America the the center for financial services.
(52:54):
And they have great initiatives like the Trump Accounts, which
are encouraging equity ownership, which were very aligned with. So
because they've been so willing to engage in lead, we've
been more and more involved, and we see it as
an opportunity to further our mission. But it doesn't mean that,
you know, we're not engaging with the Democrats as well,
because some of the Democrats are also like less on
(53:18):
the hyper progressive socialist side and more middle of the road,
and you know, they want the US to also be
number one and in business and financial services, and so yeah,
we've continued to engage on both sides. And the thing
you referred to earlier was, yeah, I got a burner
(53:40):
phone sent to me by by Governor Gavin Newsome. And
I was on a trip and I come back and
you know, my team tells me Gavin Newsom sent you
a flip phone, and like, what do you mean the
Gavin Newsom, the governor, and I'm based in Menlo Park, California.
They said, yes, you know, we checked with his team.
Speaker 5 (54:00):
It's real.
Speaker 6 (54:01):
Everyone thought it was a little bit strange, but okay.
And I opened up the phone and it's Gavin Newsome's
number in there, and of course I call it immediately, Gavin.
Gavin Newsom picks up and like, Governor, it's me vlat Tenev,
I got your phone.
Speaker 5 (54:20):
Thank you. It's very nice.
Speaker 6 (54:22):
And you know, to his credit, he said, look, there's
a perception that the state of California and me personally
or against entrepreneurship. We don't want we're an inhospitable place
for you to build companies. I want you to know that,
you know you can call me at any time, and
anytime you have a problem or you want to talk
about how we can improve the state and make it
(54:43):
a better place to do business.
Speaker 5 (54:45):
I'll pick up the call.
Speaker 6 (54:46):
And other people got this phone too, so it wasn't
just me.
Speaker 2 (54:50):
It was like a marketing strategy because he could have
just gave you his number.
Speaker 5 (54:53):
That's true, Yeah.
Speaker 2 (54:57):
Can you only call Can you only call him from
that phone?
Speaker 5 (55:00):
I haven't tried. I've only tried calling them from.
Speaker 4 (55:02):
That point immediately, Laura, let's get on this.
Speaker 6 (55:05):
But I appreciated the gesture, So, I mean, it just
shows you that I think that there are democrats that
are open to engaging with business and like what we're
doing as well.
Speaker 5 (55:15):
And I think that, yeah, I.
Speaker 6 (55:19):
Mean, we're obviously happy to engage with anyone on both
sides to further the mission of making everyone owners of
this great American industry. But of course I do appreciate
what this current administration is doing. They've been doing really
good things in general. I think they're getting some of
the important things right, and the invest America Trump Accounts
(55:42):
initiative in particular, I think can change the world if
implemented correctly. So with that one, I'm very excited. And
of course I've told the President and the Treasury who's
overseeing it, that whatever we can do to make sure
it goes smoothly, it's high quality. People actually use the account, Senate,
it's not just buried somewhere.
Speaker 5 (56:02):
Inaccessible, and explain that what that is.
Speaker 2 (56:05):
Yeah.
Speaker 6 (56:05):
So there's an initiative that passed as part of the
Budget Reconciliation bill earlier this year that'll give each child
born in this country an investment account with one thousand
dollars funded by Treasury, invested into a diversified portfolio of
think like S and P five hundred. Yeah, and you know,
it would just be passive. The investments would go in,
(56:28):
it would grow, and you know, when the child hits
eighteen and eventually and then thirty five, there's hurdles where
they assume greater control over that portfolio. But Michael Dell
and his wife Susan donated I think about six and
a half billion to increase to give two hundred and
(56:49):
fifty dollars to not just newborns, but backdated.
Speaker 5 (56:53):
Everybody under ten years.
Speaker 6 (56:57):
And I think you're going to see more and more
companies do interesting things. So one of the areas of
focus has been how do we make it as easy
as possible for money to flow into these accounts from
your family, from corporates and employers, from you know, your
church or other religious organizations. How can we make this
sort of like a multi generational giving platform that makes
(57:20):
it as easy as possible to actually give money from
us to the next generation. And to me, it's very
powerful because in so many of the other things that
we do, we're sort of like taking money from the
future and spending it now, Like the national debt and
big deficits are a form of that social security. There's
(57:40):
also an element of that, like we're funding folks now
and the debt is going to have to be paid
for in the future, so I like to counteract that.
The fact that this counteracts that, I think is very powerful.
Speaker 1 (57:53):
Yeah, and parents can put money into that account, and
it's just the idea of compound and interest over time, Right,
somebody gets that when they're born. By the time they're eighteen,
it reaches a certain amount. Obviously, if you put more
into it, there'll be more. Whereas when we started the
conversation almost it was like, what happens to the kid
who's graduating high school in twenty years and now can't
(58:14):
find a job or maybe college is not affordable.
Speaker 4 (58:16):
That accountant is at least there for them to pursue
other things. Entrepreneurship is one of those things that she
was talking about.
Speaker 6 (58:21):
Yeah, absolutely, this is like a good foundation for you know,
not just sort of a nest egg for the future financially, Yeah,
but also I think it it gives people skin in
the game. For American industries, like the biggest American companies,
(58:41):
you'll sort of like make sure that, you know, young
people feel like they have some ownership, some skin in
the game. You know, they'll be less likely to want
to burn the system down if they actually have some
skin in the game and are incentive to protect it,
which I think I think is a good thing because
so many young people feel like they don't have skin
in the game, and like, well, if if the American
(59:05):
government or the financial markets aren't working for me, what's
my incentive to you know, be in a supporter of
free markets and ownership. And I think giving people that
ownership is. Yeah, it is much much stronger. It's like
when you own a piece of land or a house,
(59:26):
you keep it in better condition. If you're just sort
of like a visitor or even renting, you know, I
don't care about it as much.
Speaker 1 (59:32):
My final question is this is probably my favorite quote
of yours this year. It was in a journal over
the weekend and they were talking about how you used
to drive a modest Tesla car. Yes, and then the
next quota says, why do I care about what other
people perceive of the CEO of Rabin. We were talking
about watches before it and the piece that talks about
(59:54):
how you're collecting.
Speaker 5 (59:57):
Cars.
Speaker 4 (59:57):
At this point, when.
Speaker 6 (59:58):
Do we should acknowledge that you guys are wearing some
very nice watches, as am I a Robinhood Court special here?
Speaker 2 (01:00:05):
Everything earned one is that one of one?
Speaker 6 (01:00:07):
No, no, no, we are we're testing it. We're testing
it for broader distribution. So maybe at some point you'll
be wearing these two.
Speaker 4 (01:00:16):
Maybe you'll see us in that well.
Speaker 1 (01:00:17):
Yeah, I just want to know, at what point during
this past five ten years did you get to the
reckoning of, like, you know what, I'm living life on
my terms.
Speaker 6 (01:00:28):
I think it was probably either Yeah, probably end of
somewhere between the end of twenty twenty two and the
end of twenty twenty three. Yeah, when things were actually
quite negative in Robinhood. And I think that that quote
(01:00:51):
was taken a little bit out of context or I mean,
I definitely said it, But what I was trying to
communicate is that, you know, a lot of times, as
a CEO or just as a human being, you're kind
of pressured to do things a certain way based on appearances,
(01:01:13):
how other people will will perceive them. Other people want things,
so maybe I should like support them publicly. And I
think there was a general shift of let me just
think about what I think is right and what I
want and communicate that rather than trying to like do
things or communicate things just because I think that's what
(01:01:33):
other people want to see. So I think authenticity in
a nutshell is actually important. I think I've gone back
and forth on this. I didn't want the outcome to
be I really like nice things. Yeah, because I'm actually
back to driving the Tesla and wearing the Court's watches.
(01:01:56):
So yeah, it wasn't It wasn't as much of a
statement about luxury and spending money, but more that, I
think authenticity is important. And if you find yourself doing
something just because it's the conventional wisdom and it's not
making you happy, then you're probably doing the wrong thing.
Speaker 2 (01:02:16):
Well glad, thank you for your time. Appreciate it.
Speaker 5 (01:02:19):
Thank you always pleasure.
Speaker 4 (01:02:21):
Appreciate you having us man, Thank you you have it? Erners,
what's up?
Speaker 1 (01:02:25):
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