Robinhood CEO says the meme-stock craze has helped ailing companies survive, and that high retail investor participation is fundamentally good for markets
Robinhood CEO Vlad Tenevtold CNBC retail investorsin meme stockshave helped struggling companies.
- Tenev made his comments ahead of the trading app's own trading debut.
Robinhoodearlier this year angered many customers when it halted buying of GameStop, AMC, and other meme stocks.
Robinhood CEO Vlad Tenev said Thursday that retail investors who've put money into so-called meme stocks have been a benefit to struggling companies and the market overall.
"I think what's interesting with what we've seen in retail investing over the past year is that a lot of these companies have been hit hard by the pandemic, right?," including airlines, retailers, and movie chains, said Tenev in an interview on CNBC before the online brokerage's own stock began trading.
"[You] have the institutions that are basically writing these companies off and then retail investors coming in and keeping them up and supporting them."
Video game retailer GameStop and movie theater chain AMC Entertainment have become popular stocks among
There are "customers that love these companies they want them to thrive. And you're seeing [companies] also get resources that allow them to hire really good management teams, in some cases, and then build for the future," Tenev said.
AMC, the world's largest movie-theater operator, has taken advantage of the rally in its shares this year, saying in June it had raised about $1.25 billion through selling shares during the second quarter and the funds would strengthen its balance sheet.
"I don't know if people have understood the ramifications of what high retail participation in the
Robinhood's shares slumped 8.4% to $34.82 in their trading debut, finishing below the IPO price of $38. The company set aside up to 35% of its IPO shares to individual investors.
Robinhood angered many of its customers earlier this year when the trading app halted buying of GameStop, AMC, and other meme stocks during a stunning rally. Robinhood had pledged to earn back the trust of those customers. The company has more than 18 million accounts and 17.7 million active monthly users.
According to Goldman Sachs, retail investors have been on track to put $400 billion into the stock market in 2021.
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