Trading platform Robinhood tops CNBC Disruptor 50 list

Trading platform Robinhood tops the CNBC Disruptor 50 list. In addition, social audio companies, such as Discord and Clubhouse, are on the rise as the pandemic drags on. CNBC’s Julia Boorstin joins ‘The News with Shepard Smith’ to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO: Tech-driven disruption in business is rarely a force for good or bad alone. Robinhood is a good example of the rocky, disruptive force that sits between the absolutes. The brokerage industry disruptor exemplifies the way that technology can turn an industry with gatekeepers into a more open platform and force the established giants to innovate and expand. That is why Robinhood earned the top spot on this year’s CNBC Disruptor 50 list, pressing Wall Street and investment giants to lower trading costs — in many cases, to nothing — and consolidate to better withstand an accelerating digital threat. And this year, the company and its CEO, Vlad Tenev, were at the center of a stock market and cultural phenomenon. In January, conversation in Reddit’s WallStreetBets forum about squeezing hedge fund investors drove the seemingly irrational buying up of GameStop and AMC Entertainment shares. That trading happened largely on Robinhood — and it wasn’t the only volatile trade where Robinhood was a center of the action. Between January and February, the platform reported the addition of 6 million cryptocurrency accounts. Debate over ‘democratize finance for all’ The Reddit uprising followed a year when millions of Americans stuck at home during the pandemic, many receiving stimulus checks, discovered Robinhood’s easy access to retail trading and became first-time investors. Tenev told CNBC late last year it was seeing deposits equal to, or multiples of, stimulus check amounts. Retail trading grew to 23% of total trading volume by the end of December 2020, up from 13% of trades a year earlier. Robinhood has stuck to one message throughout the growth and tumult, telling CNBC and others: “Our mission is to democratize finance for all.” Robinhood has had some positive, and profound, implications for the market. The company has removed barriers to trading by making investing commission-free and mobile-first. It has simplified investing, and made it more accessible and personal. Robinhood says its tools are reaching a more diverse group of investors. Citing data from a survey it conducted in December among over 98,000 Americans, it says 16% of its customers come from the Hispanic community, compared with 7% at incumbent brokerages including Schwab, E-Trade, Fidelity, TD Ameritrade and Vanguard; and 9% are African American, compared with 3% at other brokers. And it is bringing in younger investors. The company says Gen Y and Gen Z comprise 70% of its users. However, its claims of making investing “less scary” and “easier to understand” are likely to raise eyebrows among its many critics, including the Securities and Exchange Commission, Capitol Hill and the billionaire investor Warren Buffett, who says it is catering to a “casino aspect” in the recent market. » Subscribe to CNBC TV:
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