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."
As Russia intensifies its war on Ukraine, President Biden announced a ban on oil imported from the aggressor nation. Critics of Russia have said this would be the best way to force Putin to pull back, but curbs on Russian oil exports are expected to send already skyrocketing oil and gas prices even higher, further impacting consumers, businesses, financial markets, and the global economy. Leslie Beyer, CEO of the Energy Workforce and Technology Council, joined Cheddar News' Closing Bell to discuss. "It's certainly going to increase pricing, but it is the right thing to do," she said. "The industry itself has already pulled out of the significant portion of its operations in Russia."
As airlines recover from COVID-19 and the industry becomes more competitive than ever, low-fare carrier Breeze Airlines is offering 35 new routes and reduced prices for its first-class experiences. CEO David Neeleman joined Cheddar News to talk about the rollout of services amid plenty of headwinds including high fuel costs. "We can limit a lot of costs because we're a technology company that happens to fly airplanes," he noted.
Despite women as a whole being among the groups most impacted by pandemic job losses, homesharing platform Airbnb reported that women hosts brought in $12 billion in revenue last year. Catherine Powell, Airbnb's global head of hosting, joined Cheddar News to discuss how women hosting has become a huge asset for the company. "Last year 21 percent more women joined the platform than men," she said. "So they are joining the platform. They are being successful. They're more super hosts, and they're doing incredibly well."
Miss Universe 2021 Harnaaz Sandhu and Smile Train CEO Susie Schaefer join Cheddar News to talk about how Smile Train continues to support those with a cleft lip this International Women's Day.
On this International Women’s Day, Deb Cupp, president of Microsoft U.S., joined Cheddar News to talk about the implementation of her pillars to extend the company's culture, such as acting with care and putting the team first. "What I like about the pillars is they're very simple, so it's easy for us to think about how they show up every day in our lives," Cupp said.
