Barron's Streetwise - How Robinhood Went from Broken IPO to 1,000% Gainer

Episode Date: November 14, 2025

Chief brokerage officer Steve Quirk talks prediction markets and tokenization, and does a convincing dial-up modem impression. Learn more about your ad choices. Visit megaphone.fm/adchoices

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And we rolled those out and within a week before the election, we saw half a million people open accounts. We saw 600 million contracts traded on the outcome of that election. And we saw far more eyeballs than that just watching it because it different from what the polls were saying. And I think that was pretty eye-opening for people because what these contracts let you do is even if you don't want to express an opinion, they're a great source of information. Hello and welcome to the Barron Streetwise podcast. I'm Jack Howe. And the voice you just heard is Steve Quirk. He's Robin Hood's chief brokerage officer. In a moment, we'll hear from him about prediction markets and stock tokenization and the new things that investors are doing on Robin Hood. and maybe we'll get some clues about why that stock is suddenly the top two-year performer in the S&P 500.

It's gone from under $10 to over $120. Cue the confetti. Listening in is our audio producer, Alexis Moore. Hi, Alexis. Hi, Jack. Do they still do the confetti on Robin Hood? I'm not a user. Are you a user?

I know you have the app, but you're not yet a Robin Hood trader. Is that, do I have that right? That's correct. I have the app, but not like a brokerage account. Well, let's look at the prediction markets on your app. Do you want to? You want to open it up? Let's do it.

While you're doing that, I'll tell you about one prediction contract I saw. It said, will the U.S. say that aliens exist this year? And if you want to bet, yes, it cost you $4 plus $2 in fees. to win $100 if you end up being right. And I'm a stock and bond traditionalist, so I couldn't tell you whether an alien contract like that is more of a growth or a value holding. If you have personally been visited by extraterrestrials,

I don't know if that's inside information or not. If aliens aren't a good fit for your risk tolerance, I know there's a prediction on the app about Bad Bunny winning most streamed on Spotify. I think that one's more of a blue chip. What do you see there, Alexis? I see Grammy Award for Song of the Year. A lot of people are saying K-pop demon hunters.

Golden, do you know that? I've heard about the demon hunters. They're on Netflix. It's a Netflix thing. They're on Netflix. Exactly. We have a lot of football, pro and college. That's business that at one point you would normally have gone to Las Vegas to do, or maybe an overseas sports book,

or maybe someone who works out of a nondescript office behind it. Chinese food restaurant writing bets down on flash paper that quickly sets on fire if the cops show up, one of those type of operations. There is some regulation for this stuff. Robin Hood does this through a partnership with a company called Calci. That's an exchange that's regulated by the Commodity Futures Trading Commission. That's where oil and corn trading too. All right. All of this is not investing. I don't think it is. Although it's not gambling if you talk to Robin Hood, and it better not be because if it were, that would run afoul of state regulators. They tend to be ethically flexible on the subject of gambling only as far as

their taxing authority extends. They wouldn't want brokerage companies moving in on their income. Let me give you some quick background here if you haven't been following what's happening in prediction markets. Robin Hood, as everyone knows, gained a following more than a decade ago with stock and options trading that was zero commission, kind of a killer feature at the time. And it contributed to an industry-wide collapse in fees and some consolidation. Remember in 2020, e-trade sold to Morgan Stanley. That was a $13 billion deal. TD Ameritrade went to Schwab for $26 billion. And the following year, 2021, that was that short squeeze and GameStop that set off that meme stock trading frenzy, that's when Robin Hood went public for $38 a share.

But two years ago, as I said earlier, the stock was under $10. Recently, it's been around $120. So what's happened? A few things. The most basic one is swelling asset prices. Stocks have continued this epic run and crypto. That's a business that Robin Hood got into in 2019. Crypto has come roaring back with the election last year of Donald Trump.

His family has made billions of dollars in crypto ventures since the election. And the president appoints the head of the SEC. We have a new one, and he's viewed as crypto-friendly. The people are pretty enthusiastic about the crypto future. That's been good for trading and just asset gathering by Robin Hood and others. Now, in the run-up to last year's presidential election, just about a year ago, Robin Hood traded predictions on the outcome. And as we'll hear in a moment from Steve Quirk, it was an immediate hit.

And the company has since launched a predictions hub. There's contracts that cover economics and politics and pop culture and more. And the biggest draw is sports. And volume for predictions trading has doubled each quarter, the $2.3 billion for the quarter that ended in September. But the total for the month of October was larger than the, the entire third quarter, $2.5 billion. So in other words, expect a humongous fourth quarter. And that leaves Robin Hood valued at around $110 billion recently. It's closing in on half the

size of Morgan Stanley or Goldman Sachs, even though it has barely a tenth of the profit of those companies. It's gaining market share across multiple assets and products. As we'll also hear from Steve, many customers come in through event contracts or crypto, but then they go on to do the stuff that I'm more into, like retirement accounts or looking for yield on cash balances. Some Robin Hood clients even use advisors. That's enough background info from me for now. Let's get into my conversation with Steve. I'll have more to say in a bit. Here's part of the conversation. I'm here with Steve Quirk, the chief brokerage officer at Robin Hood, or as folks call them Q, right? That's your name from when you were a kid?

Yeah, I've been called that for most of my life. First initial of your last name. I'll stick with Steve. I have a lot of questions. I think many investors do looking at your stock price up well over 1,000 percent over the past couple of years. So I guess question one is, what the heck is going on? For people who missed it, who didn't see it coming, what did we miss? What should we have been watching?

What should we be watching now? What's going on? I would say if there was a theme to, you know, what's happened with not only our stock price, but just, you know, our customers and what's been happening in the market overall, retail has just become, it's become more of a presence and a force in the market overall. And it's reflected in equity options, volume options, crypto options, margin share. even in things like IPOs, which now, you know, in years past, those would be really more designated for high-end investors and people with extreme wealth. And now there's more participation by retail.

That's obviously our sweet spot. You know, we have 26 million customers that average age of early 30s and half of them are brand new to the market. Why Robin Hood? And here's what I mean by that. that you have a market value of over $120 billion right now. People probably first heard about Robin Hood is, hey, there's this, you heard about this new broker. They don't charge you anything for stock commissions, right? Crazy.

Like, we knew that stock commissions were racing lower and lower. Here's an outfit charging you zero. And folks in the back in their mind probably said, well, that's, that's not going to worry. How could you do this? Too good to be true. Yeah. But when I look today, other companies out there that were sort of these discount or online brokers, You know, e-trade, they got bought $13 billion.

Ameritrade got bought $26 billion. And here's your company, a multiple of those values. Why Robin Hood? What is it that has made you the giant gorilla now in this space? So I should give you some historical perspective. I came from those places that you mentioned. I was part of TD Ameritrade when I was acquired by Schwab, and I was part of a smaller entity called Think or Swim,

which acquired TD Ameritrade. But while I was at TD Ameritrade, we also bought Scott trade. So I've just seen a lot of consolidation in the industry. And I think what puts Robin in such a unique position is we essentially have today and tomorrow's segment of investors. And that's quite exciting because they think about investing. As much as they do it in a similar manner to generations before, they also do it slightly different.

In today's day and age, the vectors for people to enter into the market are so much different. a lot of people come into the market through crypto. A lot of people come into the market through event contracts or things like that. And then they discover the other facets of the offering. And they say, oh, you know what? Okay, I came in through crypto or event contracts. And now I'm at this point where I kind of want a retirement account or a yield account or even to have some of my assets advised, which we provide them the ability to do.

And so I think it's just an interesting time in the market. If I'm a person who's newer to the market, there's just some. many more opportunities for me to express my opinion or, you know, have an investment thesis. Are prediction markets your fastest grower right now? First of all, for people who don't know, what is this? What can you do through prediction markets at Robin Hood and characterize what you're seeing there in terms of, you know, the uptake of that business? Sure. It's the fastest growing business as we've ever had at Robin Hood. The history of prediction markets event contracts here, those words are kind of used interchangeably, but they're essentially the same

thing. They're a CFTC-NFA regulated product. And our first foray into them was the election in November. And we rolled those out. And within a week before the election, we saw half a million people open accounts. We saw 600 million contracts traded on the outcome of that election. And we saw far more eyeballs than that, just watching it because it different from what the polls were saying. And even the timing of it, you know, even if I had a portfolio that could be impacted by the outcome of that election, you could see, you know, the 50-50 went to 72, 28 very quickly. And, you know, you started to see the asset classes that people thought were going to benefit from the outcome of that election move in the after hours because we also allow that trading in the after hours. So crypto started to move. the Teslas of the world started to move in advance.

And I think that was pretty eye-opening for people because what these contracts let you do is, even if you don't want to express an opinion, they're a great source of information on what's happening. And so from there, we had a lot of interest from our customers, and they wanted to do this in a variety of areas, like some political economic figures, will the Fed drop rates, what CPI, cultural things, you know,

know everything from Grammys, Oscars, et cetera, et cetera, sports, which is big. And so it's become a complex that is quite interesting. And, you know, now we have the CME and the New York Stock Exchange that are entering. What's the biggest category right now for you? Sports. I was going to say, it ain't people betting on the Fed. It can't be. No, no. Yeah, it's sports. But I guess what's really interesting is, because the question that we get asked a lot is, who's doing this, who's transacting here. And the answer is it's very different for each category. The people that want cultural or entertainment are very different than the people who want economic, who are very different than the people want sports, and they're very different from the people who want

politics. So it kind of runs the gamut of our investor base. Does it oversimplified to say that this opens up an opportunity to take share from other businesses where traditionally people would go to for gambling? Like, Caesars can't now, you know, offer stock trading. but you can offer sports predictions. Yep. And so does that expand, I guess, the size of your potential market? How do you think about that? It already has.

It's already been happening. And so that's why I think you're seeing so many market participants come in to this space because they realize, I mean, as much as has been done here, there's so much more that can be done here. I'll give you an example. This is a tremendous source of frustration for some of our investors. I'm an apple holder. I'm picking on Apple. And, you know, I have done a lot of homework on Apple and I think they're going to ship X number of phones this quarter and, you know, I come up with my thesis on a lot of

things. And so I'm long Apple and I hold that and then earnings come out and, hey, I'm pretty accurate on all the things that I thought were going to happen. And then there's some outlier guidance that happens and the stock goes down. And people, that's super frustrating for people. Like, hey, I did things right, you know, my thesis was great, et cetera, et cetera, et cetera. So if I can instead say, hey, how many phones are they going to ship and I'm on? That's a lot better outcome. And so you think about all the ways that people can express their opinion and put, you know, some investments behind it. It becomes really fascinating. It's interesting. I can't help but think of a conversation I once had with the person who ran Tinder years ago. Yeah, yeah. And,

he was explaining to me, you know, Tinder is a dating site. I'm maybe a little too old or buried a little too long. I'm with you. But Tinder had a reputation for I think people would go there and hook up. And when this came up in the conversation, he said, Jack, you have no idea how many marriages were formed by people who met on Tinder. Now, the reason I mention that is I think Robin Hood, there's this reputation for, well, you know, back during the GameStop mania. You know, you got your Reddit chat room over here. You got your Robin Hood account over here and you're just watching things flying. You're trading. So this is a reputation of young people with, you know, this high velocity gambling type behavior. Is there anything that you see in your data and your research that tells you about the behavior of those investors as they age? I wonder if some of them go on to just become boring old S&P 500 fund plunkers or if they all just keep whipping these risky things around. What do you think? you're kind of spot on there. You know, when the original meme stock episode and saga unfolded, we had a lot of customers and there are a lot of people trading in those names. It probably

attracted a lot of customers as well. But then there was a resurgence of it probably about a year, year and a half ago. And so, you know, a lot of the media said, hey, oh my gosh, are people going crazy over there? You know, what's happening? Is this a 2.0? So we looked at all the data and we said, all the people that had come in, like 80-some percent of them, they're still here. But to your point, now they have a retirement account. Now they're, you know, in a yield product. Now they're, you know, having advised assets or other things. I mean, the point of the story there or really this narrative is I think it's less important how you get into the market. I think it's where you go once you get into the market. It's very common for people my age or other, you know,

to be judgmental about how people are investing, but at the end of the day, it doesn't really matter how you get into it or what piques your interest. It matters where you go with it. And do you do it in a suitable manner that's going to help you in the long run? And that's what we try to do, you know, give them avenues to understand and educate them so that they can do it in a manner that's going to hopefully be very beneficial for them in the long run. You claimed earlier to be a baby boomer. I'm going to check your driver's license after one. we're done here. Yeah.

I'm looking at some of the figures that your folks put out. And it's not a big portion of your customer base that are baby. When we're more that are Gen X, that's my generation, mostly millennials and younger. What's the significance of that when you do your planning and look at your business and your potential? I think the significance of it is there's a couple of shifts that have happened. As you point out, that is millennial is very strong in our customer base. But we're also a very good destination for first time investors, just because we've

done such an amazing job of removing the friction. You know, look, I'm going to go back a little bit in time. You know, there used to be a $10 commission. There used to be a minimum on trades. There used to be a lack of information. User interfaces were not very intuitive, some by design not to be. I'm hearing as you're talking in the back of my mind, the noise that the dial-up, the dial-up, exactly, the dial-a-motive on the trading account. Go ahead. Exactly. No, no, no. Trust me, you and I are very aligned. So I think what happened there was, you know, we kind of cracked the code on saying, hey, I have $5 and I can invest it without a commission. There's no minimum my account size. I have a great easy interface. It's super easy for me to do education, come up with an investment thesis. And as a result of that, you know, we're now sitting with 60% of U.S. households that are participating in the market, which is an all-time high. And Robin Hood's largely credited with bringing that big chunk of people into the marketplace. And we continue to do that.

We're a great destination for first-time investors. However, as we've started to round out the offering, to your point earlier, now we've become a destination for people who are on the top end of the generation. And those are larger accounts. So we're kind of like, to your point, like, yes, the chunk of our customers are in that category, but now you're starting to see that fill out both on the top and on the bottom. Thank you, Steve. Let's take a quick break.

We'll be back with more on Robin Hood and prediction markets and tokenization and all that good stuff. You may have heard of the sex cult nexium and the famous actress who went to prison for her involvement, Alison Mack. But she's never told her side of the story until now. People assume that I'm like this pervert. My name is Natalie Robamed, and in my new podcast, I tell you. talk to Allison to try to understand how she went from TV actor to cult member. How do you feel about having been involved in bringing sexual trauma at other people? I don't even know how to answer that question. Allison after Nexium from CBC's Uncover is available now on Spotify. Welcome back. Alexis,

I thought of a fun new game. Please, pray tell. We don't have time to play it. I won't ask you for answers, but it's called S&P 500 company or crypto coin. And how it works is I give a name and folks out there guests to themselves. The first one is called block. It sounds blockchain-y, and I guess maybe it is, but it's the company that operates Square and Cash App in the S&P 500. The next one will be easy for regular listeners, App Lovin. That's a whimsical enough name to sound crypto-y,

but they do marketing and stuff for apps. It's actually a humongous company, almost $200 billion. And the last and toughest one, smurf it. Now, you're going to think, you're thinking of the 80s cartoon with the little blue forest dwellers who live in mushroom-shaped houses, and that seems whimsical, so maybe it's crypto. But it's actually the name of an Irish cardboard box tycoon, the paper company and the S&P 500.

And that's how we play. The game didn't take off. It's not a hit, right? It's no prediction markets. All right. We did get some comments this past week from the new head of the SEC, Paul Atkins. He said that he would work on what he called a token taxonomy. Taxonomy.

Am I pronouncing that word right? Yeah. Taxonomy. Taxonomy. No? Sometimes I think I do more writing than talking, and sometimes I realize maybe I've never said a word, even though I'm more than a half century old. All right.

Well, Atkins says he wants to create a token taxonomy. And that would help tell which assets are investment contracts, and to do that, he'd rely on this long-standing test called the Howey Test. Basically, there's a Supreme Court decision that regulators use to tell what's the securities contract and what's not. And just because that decision comes from an 80-year-old court case involving the sale and leaseback of Florida citrus groves, I kid you not. I don't want you to think that our crypto regulators are using outdated means. Maybe it's a little outdated. I started trying to figure out my own taxonomy for telling what's betting and what's building wealth, but I didn't get very far.

Seems like a lot of things with ironic animals in the name end up being crypto rather than investing. But then there's Datadog. That's an unironic pet usage in the name. That's an S&P 500 stock. Here's one tip I can give novice investors. If you own an asset that rises and falls with quarterly earnings calls by a CEO, it's probably an investment. If it hits or dies based on Monday night play calling by Joe Buck and Troy Aikman, that sounds like a bet. All of this has investors obviously excited about Robin Hood stock.

It trades now at 60 times this year's projected earnings. The growth is fabulous. It's expected to bring in $4.5 billion in revenue this year. That's a 53% increase from last year. The opportunities are theoretically humongous. Robin Hood sees a total addressable market of $400 billion. That's across 16 product and service categories, both retail and institutional. I spoke with a couple of Wall Street analysts on the subject this past week.

Dan Dolev covers Robin Hood for Mizzou. financial group, he points out that because Robin Hood clients skew young, but much of the world's wealth is held by the old, as that wealth transfer happens from one generation to the next, Robin Hood has poised the profit. I can tell you that Robin Hood is attracting plenty of competition and pushback. Interactive brokers, weble, and crypto.com, those all offer prediction markets. Fan duel and draft kings. Those are the sports. betting companies. They're basically walking away from their ties to Nevada gaming. They see better opportunities in prediction markets. Draft Kings bought a small prediction market. Van Duel is partnering

with CME Group. CME's rival, Cebo Global Market, says it's also getting into prediction markets. But it's going to stay out of sports. State regulators and legislators are acting. Massachusetts has taken Kalshi to court. New York is considered. considering a bill that would regulate some event trading like gambling. I predict that you're ready to hear more now from Steve at Robin Hood. So let's get back to that conversation. I need you to explain something to me. Yeah, because I keep hearing everyone talk about tokenization.

Sure. tokenization is going to be the big thing. We're going to tokenize stocks. Yeah. But we already have stocks. Why do we need tokens for stocks? So what is tokenization? How big do you think it will become and what's the role for Robinhood?

Yeah. potentially. So we're already in the, we're already tokenizing today. And we have 400 equities, U.S. equities that are tokenized in Europe. And those are available in 31 countries in Europe. tokenization is basically, you know, having custody of the stock, but creating what I'll call almost a derivative of that stock or replica of that stock with the entitlements. So, you know, with the dividend, with the voting rights, with all the other things that come with it. And creating that on the blockchain and making it available for people. There's a huge interest around the globe in the U.S. market. Even though people like to invest in their local economies,

the names that get a lot of the attention are in the U.S. And so it's a struggle for people to get access to that. What makes it hard? Well, if I'm a broker, I have to go get registered in that country. I have to go through a lengthy procedure in order to be able to provide them the ability to trade in the U.S. market. And that's a more lengthy process than just tokenizing that and having it available in 31 countries, which we did like that. I see less value in the U.S. because I already have stock, right? The value of tokenization more broadly is the ability to do that now gives us the ability to tokenize things that people really want access to real estate and non-investable assets unless I'm an accredited investor today.

And so what this capability gives us the ability to do is be able to deliver what before had been uninvestable assets through tokenization to customers. And those can also include early stage startup companies that have not gone public or may not intend to go public because that's also a very big source of frustration for people when they watch the valuation of these AI companies and space companies and other companies that got to wait until someone's ready to sell you a cut. And by the time they're ready to sell you a cut, they've already had all they appreciate it's still good. Yeah. So I mean, that's that's tokenization. The third and final point is the technology behind it is so much more efficient and it's so

much less expensive and it's 24-7. So I can now do this 24-7 and it's happening today. So I mean, And the world in five years with respect to tokenization is going to be so cool. It's going to open the doors for retail customers to be able to do things that, you know, I'm not a accredited investor and, you know, I don't have an account this size and I'm not 60 years old and et cetera, et cetera. What do you think this business will look like in 10 years? What's your ambition? What do you, what areas you think you'll be involved in that you're not in today, more

involved in or dominant in? Right. I think there's three. The three areas that I think will. be materially different than where they are today would be number one. Robin Hood's almost exclusively self-directed today. So in other words, if I want to manage my own investments, best place to be. And, you know, if you look at our market share and equities and options and other things,

you can see that that's true. Or if it's not all the way there, we're close to being number one. Where we aren't very strong and have not really had a focus is in wealth management. And that's the next phase of, you know, a lot of these people's lives. And the exciting part about wealth management is it's two and a half to three times the size. The assets that sit there as a self-directed side. And in my view, there hasn't been a lot that's been done from an innovation standpoint. Robin Hood kind of cracked the code on making it a differentiated experience from a self-directed side.

We intend to do the same thing on the wealth management side. We started. We rolled out a product called Strategies, which is kind of unique. it's a managed solution, but it kind of like fixes some of the aspects of managed portfolios that people get frustrated with. And the example I'm referencing is, you know, if I have $100,000 being managed or I have a million dollars being managed, you know, that that 25 bips, 30 bips, whatever that person managing or whatever that solution that's managing that continues to go up with the size of the portfolio.

So if my portfolio is naturally appreciating, I'm just paying more and more every year. And the work to manage a portfolio of 100K or a million is very similar. And so we cap it in 100K and you pay 250. And that's it. It doesn't matter if you put 10 million in, 100 million in, 100K in. And then we give people very simple, easily understood, digestible, low-cost portfolios.

And they can pick from a variety, you know, they just input variables about their risk profile and that kind of dictates what they, and they can also insert individual names in there or pull them out if they don't like them. So that's very unique. And we've seen the response in seven months. We're at a billion dollars. So I think that area is going to be a huge, huge growth factor for us. So you cap the fees.

When people put in more money, they don't pay extra. They don't pay. And as you say, it's no extra work. I mean, you've now given away the big secret of how. The wealth management business, there's going to be people unhappy about that. You know, as the money grows, the fees grow, but there's not a lot of extra. Yeah. Well, I mean, that's in a managed solution.

I want to be fair to advisor. If I'm a true advisor, the complexity that might be in a family or things like that. I'm just saying for a managed solution, that's the case. Got it. And to add on to that, the wealth component, we also bought an advisory firm because we hear loud and clear from a lot of our customers, you know, we can see what. percentage of their assets are here. We can see what percentage of our assets aren't here. And they will tell us, hey, listen, I got to this point in my life where, you know, I had a

child, I bought a home. I used to have a lot of time to manage my portfolio. My portfolio was grown. I'm in the wealth accumulation phase. And so I need some help. I want somebody to help me with either a portion or all of it. And we didn't have a solution for them. And by buying this firm, now we have a referral program that we're building where we can say, hey, Would you like help? We can show you a couple advisors. You can have a conversation. If it's suitable, then go use them. Thank you, Steve, and thank all of you for listening. If you have a question, you'd like played and answered on the podcast, you can send it in. It could be in a future episode.

Just use the voice memo app on your phone. Send it to jack.com. That's h-o-u-g-h at barrens.com. Alexis Moore is our producer. You can subscribe to the podcast on Apple Podcast Spotify. wherever you listen. If you listen on Apple, write us a review. Thanks and see you next week.