This Dec. 17, 2020 file photo shows the logo for the Robinhood app on a smartphone in New York. (AP Photo/Patrick Sison, File)
Robinhood CEO Vlad Tenev called for real-time settlement of trades in a letter posted on the trading app's website on Tuesday.
"The existing two-day period to settle trades exposes investors and the industry to unnecessary risk and is ripe for change," he wrote.
Tenev said the current settlement period was part of the reason Robinhood curbed the buying of certain stocks last week amid a social media-fueled trading frenzy that pushed up the value of GameStop shares to meteoric heights.
The executive offered a similar explanation to Tesla CEO Elon Musk in a much-watched interview on the social media platform Clubhouse. Musk, who showed support for the Reddit community /WallStreetBets throughout the buying binge, grilled the executive about the restrictions.
In Tenev's view, what happened is that the clearinghouse deposit requirements skyrocketed as trading activity surged, creating a liquidity issue for the trading platform.
"The clearinghouse deposit requirements are designed to mitigate risk, but last week’s wild market activity showed that these requirements, coupled with an unnecessarily long settlement cycle, can have unintended consequences that introduce new risks," he wrote.
The settlement period was previously three days, meaning traders had that long to settle payments until the Securities and Exchange Commission shortened the period to two days back in 2017.
This likely won't be the end of Robinhood's attempts to reframe the narrative around last week's trade restrictions, which garnered widespread criticism from both lawmakers and internet personalities. Barstool Sports founder Dave Portnoy, for instance, has said he lost $700,000 because of the trading restrictions.
Tenev is expected to testify before a House committee on February 18 about the incident.
"Technology is the answer, not the oft-cited impediment," he wrote. "We believe it is important for all relevant stakeholders to convene in the near term to discuss the urgency and necessity of this issue."
Officials and power operators are bracing the public for blackouts caused by higher-than-average temperatures this summer. Utility officials in California and Arizona are warning of potential interruptions this summer due to the strain on energy supplies. Heat waves and drought conditions weaken power grids and available electricity reserves. This also makes hydroelectric power less reliable and raises the risk of wildfires.
Cisco DeVries, CEO of OhmConnect, joins Cheddar News to discuss.
The markets opened lower on Thursday as investors hold their breath ahead of the May consumer price index, which will give investors a better picture of the state of inflation in the United States. Michele Schneider, a partner and the director of trading research and education for MarketGauge.com, joined Cheddar to discuss. "If the CPI read is softer than what's expected, we actually might get a rally," she said. "If it's more than expected, then I think it will spook the market."
With real estate being a largely male-dominated industry, Stephanie Shojaee, vice president and chief marketing officer at development company Shoma Group, joined Cheddar News to discuss how she took on the gender gap for women to achieve leadership roles, starting at her own company. “It's been very important to teach all the women that work here, especially the younger ones, that they shouldn't change themselves," she said. "You need to be happy with who you are and just keep breaking barriers."
We are already starting to feel the effects of summer. Heat waves in Texas and California are already sending temperatures soaring. That could spell trouble for the nation's power supply. there are new concerns about outages in many areas of the country. Cheddar's Shannon Lanier explains the two main causes of blackouts, and what states are doing to keep the lights on and the air conditioning running.
Pinterest is making a big move as it pushes further into online shopping. The image-focused social media site is acquiring A.I.-powered shopping platform THE YES as it focuses on enhancing the user shopping experience. THE YES's technology gives users a personalized feed of products based on their preferences, and Pinterest is banking on the tech to give it an advantage among other social media apps with built-in shopping features. Julie Bornstein, founder and CEO of THE YES, joins Closing Bell to discuss the company's unique technology, why it agreed to sell to Pinterest, her vision as she takes over shopping initiatives, and more.
Keith Barr, CEO of InterContinental Hotel Group, says he is expecting an 'incredible' summer for his business as pandemic conditions have normalized and people are ready to travel.
