Who owns Robinhood? Here’s why Baiju Bhatt and Vladimir Tenev’s billion-dollar company barred GameStop trades
After individual investors accused Robinhood of manipulating the market in favor of hedge funds, the financial services revealed it will reallow limited buys of GameStop
Robinhood Markets Inc is the latest financial services company that has started to trend online. Robinhood claims to make investment simple and democratic. The online platform, which is hosted on an app and the website, has over 13 million registered users who use its traditional tools and stock tips to invest in the market.
The financial services company came into the news after it restricted the trading of a couple of stocks following an effort by users of the r/wallstreetbets subreddit to drive up their price. When GameStop stock prices skyrocketed, Robinhood reportedly barred the trading from its portal.
A majority of Internet users condemned the company’s decision on Twitter and the subreddit. The decision was also slammed by Rep Rashida Tlaib, who called for a hearing by the House Committee on Financial Services, tweeting that its action was “market manipulation” to protect the hedge funds.
Robinhood restricted GameStop
After Robinhood restricted GameStop, it suffered a massive negative backlash on app portals. A lawsuit was also filed against the company that alleges that the Robinhood mobile app “purposefully, willfully and knowingly removing the stock ‘GME’ from its trading platform amid an unprecedented stock rise.”
“In order to protect the firm and protect our customers, we had to limit buying in these stocks,” co-founder Vladimir Tenev told CNBC. “Robinhood is a brokerage firm. We have lots of financial requirements. We have SEC net capital requirements and clearinghouse deposits. So that’s money that we have to deposit at various clearinghouses."
"Some of these requirements fluctuate quite a bit based on volatility in the market, and they can be substantial in the current environment where there’s a lot of volatility and a lot of concentrated activity in these names that have been going viral on social media,” said Tenev. After facing huge backlash, Robinhood announced that it would reallow limited buys of GameSpot starting January 29.
How was Robinhood founded?
Founders of the Company: Vladimir Tenev | Baiju Bhatt
As mentioned on the Robinhood website, the story of Baiju and Tenev began from Standford where they were roommates and classmates. After graduating, they both traveled to New York to build two finance companies and later sold their own trading software to hedge funds.
In April 2013, Stanford University alums Vladimir Tenev and Baiju Bhatt founded Robinhood. The company’s name comes from its mission to provide everyone with access to the financial markets and not “just the wealthy”.
Tenev and Bhatt got the idea of Robinhood after the 2010 Flash Crash that saw an almost 1,000 points-plunge in the stock market by high-speed traders. But it was during the 2011 protests of Occupy Wall Street when the duo decided to make a trading app accessible to everyone.
Robinhood’s mobile app was launched in 2013 and used the right marketing strategies to lure users. At the pre-registration time, they told the users to refer the app to their friends if they wished to move up the list, resulting in over 1 million waiting users when the app was launched on Apple’s App Store.
Earlier in November 2020, a spokesperson from Robinhood stated that the co-founders have shared with their employees that Tenev will assume the role of sole CEO and Bhatt will continue in his role as co-founder, "supporting key business initiatives and serving on Robinhood’s board of directors.”
Who owns Robinhood now?
CEO of the Company: Vladimir Tenev
The 33-year-old Tenev is a Bulgarian-born entrepreneur who earned a degree in Mathematics from Standford University. He studied for a Doctorate in Mathematics at UCLA but dropped out to work alongside Bhatt.
Co-founder of the Company: Baiju Bhatt
The 35-year-old Bhatt is the son of Indian immigrants and earned a bachelor’s degree in physics from Stanford University, where he also got his master’s degree in mathematics.
What is the net worth of Robinhood?
In 2017, Robinhood raised $110 million at a $1.3 billion valuation led by Yuri Milner of DST Global, Greenoaks Capital, and Thrive Captial. A year later, Robinhood closed a $363 million Series D funding round led by DST Global. As of May 2018, the American financial company has raised a total of $539 million in venture capital funding, with the last valuation at $5.6 billion. Robinhood announced in 2020, a $200 million Series G funding round from their new investor, D1 Capital Partners.
During the Covid-19 pandemic, Robinhood has raised over $800 million and now has an $11.2 billion valuation. Here’s a list of the net worth of Robinhood's co-founders:
Vladimir Tenev (Current CEO)
Currently worth $1 billion.
Baiju Bhatt (Co-founder)
Currently worth $1 billion.
*All figures and calculations are from Celebrity Net Worth and may vary with time