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."
Season 13 "Shark Tank" contestant Tania Speaks secured a $400,000 deal for her Speaks Organic Skincare brand with "Shark" Mark Cuban while also being named one of the best pitches in the history of the show — all at 19 years old. Now 20, Speaks joined Cheddar News to talk about the skincare line, the clean beauty industry, and the moment that host Cuban was moved by her pitch. "I couldn't believe that he got emotional. I'm surprised I held back my tears that long," the young entrepreneur revealed. "It's just amazing for someone else to be inspired by your story, especially Mark Cuban himself."
The media giant formerly known as ViacomCBS has officially rebranded itself as Paramount Global with a focus on its streaming service, Paramount Plus. Naveen Chopra, chief financial officer at Paramount, joined Cheddar to discuss the company’s name change and streaming wars. "There are components of content licensing that we continue to do, either historical arrangements or opportunities to license content that don't really impinge on what we're trying to do with our owned and operated services and that continues to be an important ingredient in our broader financial model," he said. "But our number one priority is putting our best assets on Paramount Plus." Chopra also discussed theatrical release windows before feature films hit its service and the platform's subscription goals.
The recent 7.5% year-over-year increase in consumer prices is the highest since 1982, and drew some strong reactions from investors, with speculations that the Federal Reserve will hike interest rates by 50 points instead of 25. But other analysts believe that the Fed will stick with its original plan of 25 points next month. Chris Vecchio, Senior Analyst, at DailyFX broke down how the Fed could potentially react to the historically high inflation data.
Ride share competitors Uber and Lyft both posted their fourth quarter earnings days apart from each other. Both companies have been trying to get back on their feet after taking some pandemic-related hits, but the Omicron variant had other ideas as the year came to a close, with each company taking a hit in ridership in December. Lance Ippolito, head trader at The Future of Wealth explains how Uber and Lyft measured up this earnings period and why Uber may still have an edge over the competition.
The Super Bowl might be over, but people are still buzzing about the players, commercials, halftime show, and more. Google tracks the top searches before and after the game every year, revealing the show-stopping moments of the biggest sporting event of the year. Sadie Thoma, Director of US Creative Partnerships at Google, joined Cheddar's Opening Bell to discuss the top trends this year.
Parallel Systems has been selected to receive $4.5 million from the Department of Energy for an advanced testing program of its autonomous, battery-electric rail vehicles. The startup, which has raised more than $53 million to date, was founded by former SpaceX engineers to reimagine the rail system by creating a more efficient, decarbonized freight network. Matt Soule, Co-founder & CEO of Parallel Systems, joined Cheddar's Opening Bell to discuss what the company hopes to achieve.
