Robinhood Markets facts for kids
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| Public | |
| Traded as |
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| Founded | April 18, 2013 |
| Founders |
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| Headquarters |
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U.S.
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Key people
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Vladimir Tenev (CEO) |
| Services | Stockbroker Electronic trading platform |
| Revenue |  US$1.865 billion (2023) |
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Operating income
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▲ US$−536 million (2023) |
| ▲ US$−541 million (2023) | |
| Total assets | US$32.33 billion (2023) |
| Total equity |  US$6.696 billion (2023) |
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Number of employees
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c. 2,200 (2023) |
| Subsidiaries |
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Robinhood Markets, Inc. is an American company that helps people with their money and investments. It is based in Menlo Park, California. The company runs an online platform that lets you buy and sell stocks, exchange-traded funds (ETFs), and cryptocurrencies without paying extra fees.
Robinhood also offers individual retirement accounts (IRAs). You can do all of this using their mobile app, which first came out in March 2015. Robinhood is regulated by important financial groups in the U.S. The company earns money from interest on customer cash, selling trade information, and lending money for investments. As of late 2023, Robinhood had over 23 million customer accounts. In 2022, Robinhood launched a cryptocurrency wallet for its users.
Contents
History of Robinhood
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Robinhood was started in April 2013 by Vladimir Tenev and Baiju Bhatt. Before this, they had built fast trading systems for big financial companies. They named the company "Robinhood" because they wanted to make financial markets open to everyone, not just the very rich.
Tenev explained that it cost very little for companies to make a trade. But they often charged customers $5 to $10 for each trade. They also required people to have at least $500 to $5,000 in their accounts to start. Robinhood wanted to change this.
The company first showed its app to the public in 2014. It officially launched the app in March 2015.
By January 2015, most of Robinhood's customers were young adults, with an average age of 26. Many users checked the app daily or weekly.
Growth and Funding
In April 2017, Robinhood raised $110 million, which valued the company at $1.3 billion. This money came from several investment groups.
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In May 2018, Robinhood raised another $363 million. This brought their total funding to $539 million, and the company was valued at $5.6 billion.
In February 2018, Robinhood announced it was moving its main office to Menlo Park, California.
In May 2019, news reports said Robinhood was looking for another $200 million in funding. This could have valued the company between $7 billion and $10 billion. In November 2019, Robinhood announced it would expand its services to the United Kingdom.
During the stock market changes in 2020, more people started trading on Robinhood. In May 2020, Robinhood raised $280 million, valuing the company at $8.3 billion. A few months later, they raised another $200 million.
Going Public and Recent Events
In June 2021, Robinhood was fined by a financial regulator for issues like service outages and unclear messages. This was a large fine for the organization.
The company became public on the Nasdaq stock exchange on July 29, 2021. Its stock symbol is HOOD. The opening price was $38. It later reached a high of $85 before falling due to various reasons.
In 2022, Robinhood reduced its number of employees. In April, they cut 9% of their staff. Then in August, they announced another 23% reduction, mainly in operations and marketing.
In August 2022, Robinhood's cryptocurrency part was fined $30 million. This was for not following rules about preventing money laundering and protecting online security.
In December 2022, Robinhood launched Individual Retirement Accounts (IRAs). They even offered to match 1% of the money customers put into these accounts. In April 2023, Robinhood launched Robinhood Connect. This made it easier to add money to crypto wallets.
In May 2023, Robinhood briefly showed a "bankruptcy" tag on AMC stock. The CEO of AMC said he was thinking about suing Robinhood for this mistake.
In June 2023, Robinhood announced it would buy X1, a company that offers a credit card, for $95 million. Later that month, Robinhood had another round of layoffs, letting go of about 150 employees.
In March 2024, Robinhood officially launched its services in the United Kingdom.
Products and Services Offered
Stock and ETF Trading
Robinhood first became popular for offering trades of stocks and exchange-traded funds without charging a fee. In 2016, they added instant deposits, so money appeared in users' accounts faster. In September 2016, they launched Robinhood Gold. This is a paid plan that offers more features, like larger instant deposits and the ability to trade with borrowed money (called margin trading).
By February 2017, Robinhood had handled over $30 billion in trades. In August 2017, they started giving free stocks to users who referred new customers. In December 2017, they added options trading. Robinhood also launched retirement accounts in January 2023. However, Robinhood does not offer mutual funds or bonds.
Robinhood supports trading for stocks and ETFs listed on major exchanges like the Nasdaq and New York Stock Exchange. They also support some international stocks. In August 2018, Robinhood stopped users from buying some very risky "penny stocks."
In October 2019, other big investment companies like E-Trade and Charles Schwab also started offering commission-free trades. This was partly because of competition from Robinhood. In December 2019, Robinhood added the ability to buy small parts of a stock (fractional shares) and automatically reinvest dividends.
In March 2022, Robinhood added four more hours to its trading day. This means you can trade from 7:00 AM to 8:00 PM Eastern Time. In May 2022, Robinhood launched a stock lending program. This lets users allow Robinhood to lend out their fully paid stocks.
Cryptocurrency Trading
On January 25, 2018, Robinhood announced it would offer commission-free cryptocurrency trading. Over a million people signed up for the waitlist on the first day. Robinhood began offering trading for Bitcoin and Ethereum in some states in February 2018. By 2021, crypto trading was available in most U.S. states.
Robinhood later added other cryptocurrencies like Dogecoin and Litecoin. In September 2021, they launched a waitlist for cryptocurrency wallets. In April 2022, Robinhood rolled out these wallets to over 2 million customers. They also added more cryptocurrencies to trade. In June 2023, Robinhood removed some cryptocurrencies from its platform.
In May 2024, Robinhood received a notice from the SEC. This notice suggested that the company might have broken securities laws with some crypto tokens it offered.
Banking Features
In December 2018, Robinhood announced checking and savings accounts. They said these accounts would offer a 3% annual interest rate. However, there was some confusion about how these accounts would be insured. The products were later renamed "Cash Management."
A "Cash Management" feature was officially launched in October 2019. It offered insurance for your money through different partner banks. In March 2022, Robinhood launched the Robinhood Cash Card. This is a debit card that lets users automatically invest in stocks or crypto when they spend money. With this new card, the older Cash Management debit card was stopped.
Retirement Accounts
In January 2023, Robinhood introduced traditional individual retirement accounts (IRAs) and Roth IRAs. These are special accounts that help people save for retirement. Robinhood offers to match 1% of the money customers put into their IRA.
See also
In Spanish: Robinhood (empresa) para niños
