Robinhood is back in the news, though not in a way that will please the company or long-suffering shareholders. The stock trading app features prominently in the new movie Dumb Money, based on a Ben Mezrich book, that chronicles the meme stock insanity of 2021 when amateur investors drove up the price of moribund companies like GameStop and RadioShack—and then posted about their "tendies" (a.k.a. chicken tenders, a.k.a. market profits) on Reddit. Sebastian Stan of Captain America fame plays Robinhood cofounder and CEO Vlad Tenev.
It's not a great thing when your brand is associated with pop culture excess, but Robinhood is lying in the bed it made. When I profiled the company in 2020, Tenev laid out a series of plans he said would transform it into a Charles Schwab for a new generation of investors—but then Robinhood jettisoned most of these plans to milk the meme stock mania. Likewise, Robinhood's crypto strategy was informed by a windfall quarter from Dogecoin, a token that (surprise, surprise) proved to be a flash in the pan.
The upshot was that, when Robinhood went public in August 2021, its shares shot out of the gate to over $55 but then collapsed months later, leading to predictions the company would get acquired by a bigger and more serious player.
Today, though, Robinhood is still standing. In a new Wall Street Journal profile, Tenev says the company is done with distractions and is focused again on building for the long term. This includes retirement accounts and a credit card business, which will make it less dependent on the highly volatile trading markets.
These are good ideas that will help Robinhood diversify its revenue streams. At the same time, the company is once again displaying the sort of original thinking that helped it take off in the first place. This includes 24/7 trading for popular stocks, and a first-of-its-kind plan to offer a 1% match to users who contribute to a Robinhood IRA. The latter idea came about after Robinhood realized that many of its customers had more than one job and lacked access to a corporate retirement plan. It also reflects the spirit of innovation that helped Robinhood become a hit with young investors in the first place.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
