The Journal. - How Robinhood’s CEO Became a Cult Hero

Episode Date: December 16, 2025

Risky investing strategies are on the rise, and Robinhood’s CEO Vlad Tenev is leading the charge. He’s built the company’s trading app not just to buy and sell ordinary stocks, but to make it easier to invest in more exotic financial products. WSJ’s Hannah Erin Lang profiles Tenev and explores the extraordinary success his company has had over the past year. Ryan Knutson hosts. Further Listening: - Free Trading Isn't Free: How Robinhood Makes Money - ‘To The Moon’ From the Journal Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

A few months ago, our colleague Hannah Aaron Lang went to Las Vegas to attend a flashy conference. The made event of the weekend happened at this place called the Grand Prix Plaza. It's this tourist attraction and venue for Formula One racing. So there was a kind of race car theme to the whole event. The conference was packed. Everyone is really excited to be there. Lots of them have traveled from over the country. and the whole room is kind of buzzing.

Then the lights go dark and these sort of green lights start flashing and the bass starts thrumming. The person everyone was so pumped to see was Vlad Tenive, the CEO of the investing app Robin Hood. And Vlad strolls onto the stage and beams at the crowd.

Wow. He's wearing this rink. race car driver's jumpsuit with the Robin Hood logo on the back, and these green and black customized Nike sneakers that I later find out have Vlad sort of etched across the tongue. We've had a good year, haven't we? You guys look good, everyone's dressed nice. Welcome to the Grand Prix Plaza in beautiful Las Vegas. So what was the message that Vlad Tenev was there to deliver?

He basically says, I've often compared trading to playing the violin because you have to practice and you have to put in the reps and sort of learn the markets that way. But actually, I've thought about it, and I think trading is a lot more like driving a race car. But I think racing is actually a better comparison for one simple reason. The car really matters.

And that's what Robin Hood is here to do. He essentially says we are the race car that is going to help you win this race. Oftentimes, a finely tuned machine can make all the difference. And that's the role that we feel Robin Hood plays for our active traders. Everyone knows investing carries risks, but Tennevin and his companies seem to be pressing the pedal to the metal. Risk taking is kind of back for individual investors,

and they're getting rewarded for it. And there's not a lot of people doing more to stoke those spirits than Vlad and Robin Hood. The company's critics say that Robin Hood might be spurring a new generation of investors to view play in the markets as a kind of quick-hit game that more closely resembles a casino than, say, a long-term pathway to build wealth. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, December 16th.

Coming up on the show, the risk-loving traders fueling the rise of Robin Hood. This episode is brought to you by Fidelity. You check how well something performs before you buy it. Why should investing be any different? Fidelity gets that performance matters most. With sound financial advice and quality investment products, they're here to help accelerate your dreams. Chat with your advisor or visit fidelity.ca slash performance to learn more. Commissions, fees, and expenses may apply.

Read the funds or ETFs prospectus before investing. Funds and ETFs are not guaranteed. Their values change and past performance may not be repeated. Vlad Tenive, the CEO of Robin Hood, is on top of the world right now. His company is raking it in. Not only was it added to the S&P 500 stock index this year, it was also one of the best-performing stocks among all 500 companies. But just a few years ago, Tenev and Robin Hood were really struggling.

Tenive co-founded Robin Hood more than a decade ago, with a goal of democratizing finance. The idea was to make buying and selling stocks easier and more accessible. And the big way that they initially make waves is that not only do they build this stock trading app for millennials, but they're going to let their customers trade for free. And that was really innovative at the time. Most brokerage charged commissions, you know, a fee that you had to pay every time you trade.

The app took off. And in 2021, it played a big role in the GameStop saga, which is when small-time investors banded together to buy GameStop stock and sent it soaring. But as the trading mania peaked, volatility became so extreme that at one point, Robinhood restricted trading of meme stocks and left investors with only two options, hold or sell. But by preventing people from buying, it blunted GameStop's growth and made customers furious. The company said at the time that it had to restrict trades in response to capital requirements from its clearinghouse. And this is a really tough moment.

It thrust Robin Hood into the national spotlight in a way it hadn't been before. And it's in the hot seat in a lot of ways. and Vlad is in the hot seat in a lot of ways. Robin Hood customers are furious. Wall Street is mad. Regulators and lawmakers are now involved. Intentive got raked over the coals. Here he is in an interview back then

with Dave Portnoy of Barstool Sports. I'm proud of the way the team handled the crisis by and large. We were able to protect the firm. We were able to prevent customers from having a bigger issue. That's the part. How can you, and that line you just said, like, proud of how he handled it. How can that be possible? Eventually, Tennev testified in front of Congress

and tried to distance himself from the risky culture that fueled the GameStop situation. Thank you for the invitation to speak about Robin Hood and the millions of people we serve. As he gets in front of Congress and says, look, actually, the majority of our customers are buying and holding stocks for the long term. Contrary to some very misleading and highly uninformed reports, we see evidence that most of our customers are investing for the long term. You know, maybe what you and I might call, like, plain it safe. You know, I'm going to buy a blue chip stock, hold on to it for a really long time, and collect my gains that way.

And he makes a point to tell lawmakers that only about 2% of Robin Hood's customers are day traders. Why do you think he wanted to emphasize that point, that Robin Hood wasn't about risky investing? Yeah, because I think in this moment, a lot of people are taken aback by what is in many ways like the first real instance of retail traders really flexing their muscles and again making huge waves on Wall Street. And I think a lot of regulators, lawmakers, you know, professional investors are trying to make sense of this and are maybe a little skeptical of these aggressive investors. And I think, you know, Vlad's instinct

is to say that Robin Hood is not necessarily synonymous with this group of investors. A few months later, things got even worse. Robin Hood went public on the stock market and really struggled to get investors to buy in. And what a shaky trading debut it was. In fact, the worst trading debut for a U.S. IPO of its size. At one point, Robin Hood's market cap is about equal to the cash in its bank account, which is kind of like...

It feels like saying the company is like worthless. Yeah, exactly, exactly. Yeah, I would say it's kind of like a failing grade from Wall. Street, like giving your company an F, so to speak. What does he decide to do at that point? So it's a really challenging time for Vlad and for Robin Hood. And as he told this to me, he basically decides to take a little bit of time with his family, go on a trip and try and get some perspective.

So he goes on a family trip to Maui, and he gets this call, hey, we're hearing that Sam Bankman-Fried, the now-in-fried, the now-in-familiar. his crypto founder. Mm-hmm, who is serving jail time, but this is before that. Right. This is pre-jail. He's looking to buy a piece of Robin Hood. And this is basically a sign that Robin Hood looks so weak that it's now a potential

takeover target. This is a real low point for Latin. He was still in Maui, which is very beautiful. Right, exactly. So I guess it's as low as you can get when in Maui. Sam Begman-Fried never ended up taking over Robin Hood. but the moment was a turning point for Tenive. He essentially decides to take this back to basics.

He even thinks to himself, let's say the board fired me tomorrow, and they brought in my replacement. Like, what would that person do? And how can I kind of start from the ground up? One thing he realizes is that the company is essentially not focusing on the right customers. Up until that point, Robbins, Robin Hood had been mainly focused on first-time investors, many of whom weren't very aggressive.

But the customers that made the most money for Robin Hood's business were more like the active traders from the GameStop saga. And they also happen to be some of the most frustrated with the platform. And their chief brokerage officer was talking to me about it and compared it to an airline whose frequent flyers hate the airline the most. It just didn't really make sense for the business. So Vlad basically decides that he, He needs to start from square one and rebuild the company with these traders at its core.

How Tenev transformed the company and what it means for the world of investing is after the break. After nearly hitting rock bottom, Vlad Tenev, the CEO of Robin Hood, realized he needed to rethink the company's strategy. He told Hannah that rather than focusing on cautious, first-time investors, he wanted to lean into the most active users, the ones who are often taking the biggest risks. He essentially offers them a better trading platform, more products, more ways to trade, and especially most recently in the past year,

these access to newer markets that maybe competitors aren't offering. yet. Robinhood started making it easier than other platforms, not just to buy and sell stocks, but also to invest in cryptocurrencies and other high-risk financial products like zero-day options. Zero date to expiration options, which are these ultra-risky, fast-expiring contracts that require perfect timing, and they come with huge risk, but huge reward as well. One trader that I talked to that primarily trades zero-date options told me, I can turn $500 or $600 into $50,000 or $60,000 if I, you know, if I make the perfect trade. Mm-hmm. Sounds nice. Right, exactly. But of course, the converse of that is that you have the

potential for huge losses as well. And because of the high risk involved, it requires this kind of perfect timing of the market. And it does open, it is one of the highest risk trades out there to engage in. But of all the things Robin Hood has leaned into, prediction markets have drawn the most scrutiny. And we've rolled out a new prediction markets hub, which you can see right here on the homepage. This has been really popular. So these are platforms where traders can buy futures contracts tied to the outcome of events happening in the future. And they predict that so-and-so will become the president or whatever, right? Exactly. Exactly. So elections, like the Federal Reserve meeting, you can basically put money down on the outcome of these future events that they pay

off if your prediction is accurate. And the type of contract that has made quite a splash is sports. So these prediction markets are available for sports games and entertainment events. Robin Hood, getting into sports, the popular trading platform this week, added a prediction in markets hub for just in time for March Madness. So not only can you bet on or hedge your portfolio against who is going to win the election, for example, but you can also bet on the winner of, you know, the Monday night football game. Or whether the Portland Trailblazers will win the NBA championship? Right, right.

In my lifetime. How is this any different from sports betting apps like Fanduel? That's essentially the question. that critics are asking. These things function like futures contracts, but on their face, they really resemble just plain sports gambling. Which is not legal in every state in America. Exactly. So Robin Hood is not necessarily new to this criticism of blurring the lines between proper investing, quote unquote, and outright gambling. But this really raised eyebrows because it seemed to blur those lines in a newer and bolder way than ever before.

Earlier this year, Robin Hood pulled Super Bowl betting contracts from its platform after regulators raised concerns that the products might be illegal. The company said at the time that it believed it was in full compliance with regulations. For Robin Hood's most active customers, Tenive is giving them exactly what they want. Hannah spoke to some of them in Vegas. This is a platform where I finally feel heard and I finally feel like I'm actually connecting with the group, the community, and they're listening to what you're listening to what I'm. we want and they're constantly coming out with new things like cortex and all these other things

to allow us young guys that are just you know we're just um we can be our own hedge funds the UI is just so clean so user friendly yeah that just anyone can just hop on make an account and they just know what to do and in a stark contrast to just a few years ago Robin Hood's users are big fans of 10 of these days I feel like he's like an Elon Musk of the financial arena it's just a really down-earth guy. Yeah. I feel like he actually cares about his custom base, retail base, which is really rare for his CEO.

It's just cool, awesome guy, and he knows what he's doing, he knows how to figure it out. Yeah. I like it. I just wish I could go to. In addition to changing the app, Ten of has changed the entire personality of the company.

So I think it's worth noting that there is a conflating of investing in entertainment that seems to be happening there, that especially when we're talking about the event. in the presentation is very intentional on Vlad's part. I mean, even the earnings calls are designed based on NBA post-game interviews. I mean, the icon that prior generations looked up to was like Warren Buffett, and who said buy an index fund and hold it for the rest of your life. Yeah.

And that's pretty much it. Yeah, I mean, it's like it couldn't be more different from the way that Vlad talks about investing in finance, which is kind of things. exciting and futuristic and kind of almost makes you want to be a part of this movement and this club. All of this has done wonders to Robin Hood's business. The company's stock has increased over 200% this year, and Tenive's net worth has ballooned too. For Robin Hood's users, things have been going well. The stock market has been on a tear the past few years, and their accounts only seem to move in one direction, up and to the right.

The flip side of that is what happens if, or I should say when markets go the other way, individual investors have more choices and ways to take on risk than never before, and that has compounded their gains in the good times that we've seen recently. And the big question, the concern that I hear from Robin Hood's critics, is will it compound the pain when markets experience a really prolonged downturn. So how is the company or Vlad Tentav responded to all of these concerns? Their point of view is essentially that they serve the next generation of investors. And their chief brokerage officer told me, you know, we are introducing more asset classes

and capabilities to people. That's what they want. And that's sort of their point of view and their response to this criticism. And I think it's worth noting that this has really worked for them. And their customers are quite pleased at the moment. Hannah says that in many ways, tenive is just giving people what they want. The rise of Robin Hood has been really emblematic of a much broader shift going on in the world of financial markets right now, which is the growing power of individual investors. And we talk about individual versus institutional investors with institutional, primarily being

Wall Street, banks, folks that are trading on the behalf of those institutions. At the same time, though, by giving people what they've been, want. He's also getting more people to want it. These really plugged in active traders that are buying and selling stocks, options, cryptocurrencies, on a daily basis, practically. That group has grown so much larger and gained so much power over the past five years, and even more so in just the past year. And the success of those folks is in many ways tied to the success of Robin Hood. Vlad has been at the forefront of offering more access and capabilities within the world of markets to his customers. Remember how Robin Hood got added to the S&P 500 this year?

The company it replaced was Caesar's Entertainment, the largest casino entertainment company in the U.S. That's all for today. Tuesday, December 16th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode by Alexander Asipovich and Catherine Sayer. Thanks for listening. See you tomorrow.