MW Robinhood's Vlad Tenev has led a trading revolution to become a new Wall Street power

By Gordon Gottsegen

Backed by an army of retail investors, the 38-year-old CEO is shaking up the financial order

Vlad Tenev has a message for Wall Street professionals confounded by the everyday investors who have become a driving force in the stock market and beyond.

Sitting in a conference room in midtown Manhattan wearing a short-sleeved shirt and espadrilles, the chief of Robinhood laid out his plan to lead his band of retail traders to new investing frontiers and make them more central to financial markets than ever.

"I think the long-term trend is going to be more and more retail investing," Tenev told MarketWatch.

Currently, people make money by working or by investing, he noted. But in his most extreme outlook for the future, Tenev anticipates that if artificial intelligence automates jobs out of existence, investing will become even more important. "We'll have to get more and more people invested."

After introducing zero-commission trading on a mobile-phone app a decade ago, Tenev has helped build an army of everyday investors who this year have bought every stock-market dip - from President Donald Trump's "liberation day" tariff announcement to the outbreak of the Israel-Iran war - leaving many professional hedge-fund and institutional traders in the dust.

There are currently 25.9 million individuals with an active Robinhood account, defined as one that has been funded with cash or that completed a transaction in the last 45 days. Those accounts recently held $255 billion, up 89% in the last year. At roughly $84.50 per share, the company's stock (HOOD) has soared by 126% in 2025, giving Robinhood a recent market valuation of $73 billion.

This week Tenev, 38, took something of a victory lap, making appearances on Fox Business News and CNBC in the days leading up to the company's annual shareholder meeting. With an app that at times has made trading in volatile markets feel like a game, Robinhood has adjusted in recent years to scrutiny from regulators claiming it promotes risky behavior, and to bouts of customer frustration after its app experienced outages at key moments of market stress. Nothing, however, has slowed this juggernaut.

Robinhood, which is known as the go-to platform for young, newbie traders, is also steadily becoming a financial superapp. Beyond trading stocks and options, Robinhood has expanded into areas including credit cards, private banking, prediction markets and futures. It has a desktop platform built to service advanced active traders and a crypto business that generated over half a billion dollars in revenue last year.

Not long ago, as most brokerage and retail-oriented investment firms were focused on passive investing strategies that blindly track stock indexes, Tenev was first to tap into a clear appetite for active and mobile stock trading, planting a seed that evolved into the retail-investing boom of today. Big entrenched competitors like Charles Schwab $(SCHW)$ and Fidelity raced to catch up, and their combined efforts unleashed a retail-trading revolution.

"Why do I think retail [investors are] spending more time investing than ever? The tools that they have are a lot easier to use," Brandon Tepper, global head of data at Nasdaq, told MarketWatch. "Think about how simple it is to download an investing app on a mobile device and how simple it is to get an account set up."

Indeed, everyday investors bought stocks like crazy in April, according to data from JPMorgan Chase & Co. $(JPM)$, sometimes accounting for roughly a third of daily trading volume. That retail buying helped stocks stage one of the most epic comebacks in recent memory, frustrating many professional traders who were net sellers of stock during the policy uncertainty that accompanied Trump's initial announcement of new tariffs.

"Retail is more active than ever. And I think we're seeing the overall financial industry have to make significant adjustments to not only incorporate this, but to embrace this new audience," said Tom Bruni, vice president of community at Stocktwits, a social-media platform for retail investors.

How mobile-first, zero-commission trading changed everything

How did this happen? How did a startup that began as a social-feed app in 2013 unleash everyday investors on the markets?

In 2011, Tenev, then 24 years old, and his Robinhood co-founder, Baiju Bhatt, started out by building Chronos Research, coding high-frequency trading software for institutional investors like banks and hedge funds.

At the time, the two were watching a growing trend. Smartphones were in the pockets of 35% of Americans, and with that came the rise of the mobile-first ecosystem. It was the "there's an app for that" era, and tech companies like Uber and Instagram were building businesses entirely based on how mobile devices worked.

In 2012, Tenev had the idea of creating a stock-trading platform with an easy-to-use mobile user interface, Tenev recounted in an interview with Stocktwits. And while handful of banks like Chase and Bank of America had apps, and some brokers like E-Trade and Schwab had apps that allowed investors to place stock trades, when Tenev and Bhatt asked investing professionals what they used to research stocks on their mobile devices, most of them didn't have an answer.

Tenev and Bhatt started Robinhood in 2013 as an online social venue where users could talk about stock-investment ideas. By the end of that year, Robinhood announced the launch of a brokerage that would offer commission-free trading as part of its app. Signups for Robinhood's waitlist exploded, Tenev said.

Robinhood's "commission-free" offer was unique. Back then, it was the norm for brokerages to charge a commission for every trade - that's how these businesses made money. The cost of those commissions had steadily decreased since Charles Schwab & Co. started operating as a discount brokerage in 1975. But Tenev wanted to bring this process to its conclusion by finally bringing commissions down to zero.

Robinhood would make money in another way. Instead of customers paying Robinhood per trade, Robinhood would take people's trades and send them to market makers like Citadel Securities, which would then pay Robinhood to execute its customers' trades. This model is called "payment for order flow" and had been pioneered years earlier with the help of financier Bernie Madoff.

But retail investors on the platform didn't care about how Robinhood made money - at least not at first. They just saw that they were able to trade for free. Gradually, more and more retail investors joined Robinhood and began trading more actively. By 2018, the platform had 4 million users, surpassing retail brokerage E-Trade.

The zero-commission model lit a fire under Robinhood's competition.

"[Robinhood] devised a new model and became so pervasive. They were a juggernaut in 2017 and 2018 and they were growing. That's why TD [Ameritrade] and E-Trade and everybody else adopted the zero-commission model," Paul Rowady, director of research at Alphacution, a financial research firm, told MarketWatch. "They forced everybody's hand because they had made it so easy for people with very little money to sign up and trade."

Getting rid of commissions had a huge impact on retail-investor participation in the stock market.

When TD Ameritrade got rid of commissions in October 2019, its daily client trades averaged less than 1 million, according to an Alphacution research paper. By March 2020, that figure was getting close to 3 million per day. E-Trade also eliminated commissions in October 2019, a month when it saw a total of 6.8 million trades. In March 2020, that number was close to 20 million, the paper showed.

A pandemic and a meme-stock craze

The zero-commission trading that Robinhood pressured other firms to adopt kicked off a snowball effect of retail trading. That turned into an avalanche in the spring of 2020.

The pandemic had left people stuck at home and bored. Unemployment was high and many people were collecting increased unemployment benefits. Markets were volatile and certain tech stocks were soaring. Many live sports events were canceled and sports bettors were looking for another outlet. Stimulus checks gave people free money. All these factors fueled a retail-trading craze.

For Robinhood, the pandemic was like a sugar high - sweet until the crash. By the end of 2020, it had 12.5 million funded accounts, up from 5.1 million the year before, and had raised $1 billion in new funding as a private company with a valuation of $11.7 billion.

Growing a company that quickly may be desirable, but it's not without its challenges. In March 2020, Robinhood's trading platform experienced a big outage that caused trouble for the company. Tenev said Robinhood's systems were down for almost a full trading day and were spotty over the course of a month. Meanwhile, the stock market was whipsawing, and Robinhood's users wanted to be able to trade. These system issues came right at the start of the pandemic, and suddenly Robinhood was facing financing challenges and regulatory scrutiny. But at the same time, its business was accelerating.

"The complaints from 10 million customers are 10 times louder than from 1 [million]," said Tenev. "We had to staff up and focus a lot on areas that until that point we hadn't focused as much on because we were just trying to grow and become a viable business."

Due to the brokerage's growing size, some regulators started looking at the platform more carefully. At the time, Robinhood's app shot out digital confetti when a user placed their first trade and would send push notifications in order to persuade people to invest. The Massachusetts Secretary of State Securities Division claimed this amounted to the "gamification" of investing and accused Robinhood of pushing inexperienced investors into risky trades. The company later settled for $7.5 million and changed some of its practices.

MW Robinhood's Vlad Tenev has led a trading revolution to become a new Wall Street power

By Gordon Gottsegen

Backed by an army of retail investors, the 38-year-old CEO is shaking up the financial order

Vlad Tenev has a message for Wall Street professionals confounded by the everyday investors who have become a driving force in the stock market and beyond.

Sitting in a conference room in midtown Manhattan wearing a short-sleeved shirt and espadrilles, the chief of Robinhood laid out his plan to lead his band of retail traders to new investing frontiers and make them more central to financial markets than ever.

"I think the long-term trend is going to be more and more retail investing," Tenev told MarketWatch.

Currently, people make money by working or by investing, he noted. But in his most extreme outlook for the future, Tenev anticipates that if artificial intelligence automates jobs out of existence, investing will become even more important. "We'll have to get more and more people invested."

After introducing zero-commission trading on a mobile-phone app a decade ago, Tenev has helped build an army of everyday investors who this year have bought every stock-market dip - from President Donald Trump's "liberation day" tariff announcement to the outbreak of the Israel-Iran war - leaving many professional hedge-fund and institutional traders in the dust.

There are currently 25.9 million individuals with an active Robinhood account, defined as one that has been funded with cash or that completed a transaction in the last 45 days. Those accounts recently held $255 billion, up 89% in the last year. At roughly $84.50 per share, the company's stock (HOOD) has soared by 126% in 2025, giving Robinhood a recent market valuation of $73 billion.

This week Tenev, 38, took something of a victory lap, making appearances on Fox Business News and CNBC in the days leading up to the company's annual shareholder meeting. With an app that at times has made trading in volatile markets feel like a game, Robinhood has adjusted in recent years to scrutiny from regulators claiming it promotes risky behavior, and to bouts of customer frustration after its app experienced outages at key moments of market stress. Nothing, however, has slowed this juggernaut.

Robinhood, which is known as the go-to platform for young, newbie traders, is also steadily becoming a financial superapp. Beyond trading stocks and options, Robinhood has expanded into areas including credit cards, private banking, prediction markets and futures. It has a desktop platform built to service advanced active traders and a crypto business that generated over half a billion dollars in revenue last year.

Not long ago, as most brokerage and retail-oriented investment firms were focused on passive investing strategies that blindly track stock indexes, Tenev was first to tap into a clear appetite for active and mobile stock trading, planting a seed that evolved into the retail-investing boom of today. Big entrenched competitors like Charles Schwab (SCHW) and Fidelity raced to catch up, and their combined efforts unleashed a retail-trading revolution.

"Why do I think retail [investors are] spending more time investing than ever? The tools that they have are a lot easier to use," Brandon Tepper, global head of data at Nasdaq, told MarketWatch. "Think about how simple it is to download an investing app on a mobile device and how simple it is to get an account set up."

Indeed, everyday investors bought stocks like crazy in April, according to data from JPMorgan Chase & Co. (JPM), sometimes accounting for roughly a third of daily trading volume. That retail buying helped stocks stage one of the most epic comebacks in recent memory, frustrating many professional traders who were net sellers of stock during the policy uncertainty that accompanied Trump's initial announcement of new tariffs.

"Retail is more active than ever. And I think we're seeing the overall financial industry have to make significant adjustments to not only incorporate this, but to embrace this new audience," said Tom Bruni, vice president of community at Stocktwits, a social-media platform for retail investors.

How mobile-first, zero-commission trading changed everything

How did this happen? How did a startup that began as a social-feed app in 2013 unleash everyday investors on the markets?

In 2011, Tenev, then 24 years old, and his Robinhood co-founder, Baiju Bhatt, started out by building Chronos Research, coding high-frequency trading software for institutional investors like banks and hedge funds.

At the time, the two were watching a growing trend. Smartphones were in the pockets of 35% of Americans, and with that came the rise of the mobile-first ecosystem. It was the "there's an app for that" era, and tech companies like Uber and Instagram were building businesses entirely based on how mobile devices worked.

In 2012, Tenev had the idea of creating a stock-trading platform with an easy-to-use mobile user interface, Tenev recounted in an interview with Stocktwits. And while handful of banks like Chase and Bank of America had apps, and some brokers like E-Trade and Schwab had apps that allowed investors to place stock trades, when Tenev and Bhatt asked investing professionals what they used to research stocks on their mobile devices, most of them didn't have an answer.

Tenev and Bhatt started Robinhood in 2013 as an online social venue where users could talk about stock-investment ideas. By the end of that year, Robinhood announced the launch of a brokerage that would offer commission-free trading as part of its app. Signups for Robinhood's waitlist exploded, Tenev said.

Robinhood's "commission-free" offer was unique. Back then, it was the norm for brokerages to charge a commission for every trade - that's how these businesses made money. The cost of those commissions had steadily decreased since Charles Schwab & Co. started operating as a discount brokerage in 1975. But Tenev wanted to bring this process to its conclusion by finally bringing commissions down to zero.

Robinhood would make money in another way. Instead of customers paying Robinhood per trade, Robinhood would take people's trades and send them to market makers like Citadel Securities, which would then pay Robinhood to execute its customers' trades. This model is called "payment for order flow" and had been pioneered years earlier with the help of financier Bernie Madoff.

But retail investors on the platform didn't care about how Robinhood made money - at least not at first. They just saw that they were able to trade for free. Gradually, more and more retail investors joined Robinhood and began trading more actively. By 2018, the platform had 4 million users, surpassing retail brokerage E-Trade.

The zero-commission model lit a fire under Robinhood's competition.

"[Robinhood] devised a new model and became so pervasive. They were a juggernaut in 2017 and 2018 and they were growing. That's why TD [Ameritrade] and E-Trade and everybody else adopted the zero-commission model," Paul Rowady, director of research at Alphacution, a financial research firm, told MarketWatch. "They forced everybody's hand because they had made it so easy for people with very little money to sign up and trade."

Getting rid of commissions had a huge impact on retail-investor participation in the stock market.

When TD Ameritrade got rid of commissions in October 2019, its daily client trades averaged less than 1 million, according to an Alphacution research paper. By March 2020, that figure was getting close to 3 million per day. E-Trade also eliminated commissions in October 2019, a month when it saw a total of 6.8 million trades. In March 2020, that number was close to 20 million, the paper showed.

A pandemic and a meme-stock craze

The zero-commission trading that Robinhood pressured other firms to adopt kicked off a snowball effect of retail trading. That turned into an avalanche in the spring of 2020.

The pandemic had left people stuck at home and bored. Unemployment was high and many people were collecting increased unemployment benefits. Markets were volatile and certain tech stocks were soaring. Many live sports events were canceled and sports bettors were looking for another outlet. Stimulus checks gave people free money. All these factors fueled a retail-trading craze.

For Robinhood, the pandemic was like a sugar high - sweet until the crash. By the end of 2020, it had 12.5 million funded accounts, up from 5.1 million the year before, and had raised $1 billion in new funding as a private company with a valuation of $11.7 billion.

Growing a company that quickly may be desirable, but it's not without its challenges. In March 2020, Robinhood's trading platform experienced a big outage that caused trouble for the company. Tenev said Robinhood's systems were down for almost a full trading day and were spotty over the course of a month. Meanwhile, the stock market was whipsawing, and Robinhood's users wanted to be able to trade. These system issues came right at the start of the pandemic, and suddenly Robinhood was facing financing challenges and regulatory scrutiny. But at the same time, its business was accelerating.

"The complaints from 10 million customers are 10 times louder than from 1 [million]," said Tenev. "We had to staff up and focus a lot on areas that until that point we hadn't focused as much on because we were just trying to grow and become a viable business."

Due to the brokerage's growing size, some regulators started looking at the platform more carefully. At the time, Robinhood's app shot out digital confetti when a user placed their first trade and would send push notifications in order to persuade people to invest. The Massachusetts Secretary of State Securities Division claimed this amounted to the "gamification" of investing and accused Robinhood of pushing inexperienced investors into risky trades. The company later settled for $7.5 million and changed some of its practices.

(MORE TO FOLLOW) Dow Jones Newswires

June 27, 2025 09:30 ET (13:30 GMT)

MW Robinhood's Vlad Tenev has led a trading -2-

The trading volume and the scrutiny around it at times became too much for Robinhood to handle. In January 2021, when the meme-stock mania was at its peak, Robinhood prevented its users from buying some of the popular meme names, like GameStop $(GME)$, AMC $(AMC)$ and Best Buy $(BBY)$. The company cited its financial obligations as a brokerage - like Securities and Exchange Commission net capital obligations and clearinghouse deposits - as the reason for the trading pause.

But the damage was done. Meme stocks began to fall in late January 2021, and many Robinhood customers were left with a bad taste in their mouth.

"Not only were people turned off because [Robinhood] turned off trading, the biggest influencers in the world - [like Barstool Sports founder] David Portnoy - were saying they need to lock up the owners because of that," Scott Acheychek, chief operating officer of Rex Financial, told MarketWatch. "There was this viral moment to get rid of your Robinhood app."

Tenev was in the hot seat. He had to testify in front of the House of Representatives about Robinhood's decision to restrict trading. Rep. Alexandria Ocasio-Cortez, a Democrat from New York, called into question Robinhood's whole business model by scrutinizing the validity of payment for order flow. Retail investors took to Reddit to complain about the company and even backed a class-action lawsuit.

Robinhood went forward with an initial public offering in July 2021 while it was still dealing with the brand fallout. Shares of Robinhood hit $70.39 within their first week of trading but fell steadily over the next year, hitting a closing low of $7.05 in June 2022. Business metrics like monthly active users, net deposits and average revenue per user fell from their 2021 highs and stayed down throughout 2022.

Retail investors stuck around

Although many retail investors said they would leave Robinhood, they remained interested in capital markets. The features Robinhood helped pioneer kept individuals engaged and trading, sometimes with other tech-savvy brokerages like Public, Webull $(BULL)$ and eToro $(ETOR)$. Stocks entered a bear market in 2022, but retail investors were still more active that year than they had been before the pandemic.

More brokerages started to offer options trading to their retail clients and, taking a page from Robinhood's playbook, worked to simplify the user experience of their trading platforms. Brokerages also began offering more educational materials as people started trading more actively and were hungry for information that could help them.

"Investors have tools that professionals used to have in the palm of their hand," Nasdaq's Tepper said.

This created a cyclical effect. More retail investors in the market meant financial institutions were catering to them more, which then persuaded the investors to stick around. This growing demographic of retail investors was large enough to have an impact on the overall stock market. Single stocks moved when retail investors piled in, just like they did during the meme-stock mania. And the tendency of retail investors to buy the dip meant that money flowed into the market to cushion the blow during selloffs. Market structure began shifting, and demand for exchange-traded funds and passive investing grew too. An increasing number of financial institutions began taking crypto - which had been popularized by retail investors - seriously. Markets pushed to stay open 24 hours in order to allow individuals to trade whenever they wanted.

The pied piper of retail traders

As the stock market started another upward climb, Robinhood began to earn back the trust of everyday traders.

"The market had never seen a GameStop situation like that before. And so it's understandable that things would break," Stocktwits' Bruni told MarketWatch. "I think Robinhood's response overall was a positive one. They kept their heads down. They kept building."

Tenev pushed Robinhood to expand its business beyond payment for order flow. One of the ways it did this was by scaling its crypto operations. Crypto allowed Robinhood to collect more fees per trade than stock orders did and capitalized on investor appetite for digital currencies.

"For Robinhood, the majority of the firm's transaction-related income ties to cryptocurrency at this point, and the firm achieved profitability for the first time in 2024 on the back of a veritable surge in crypto trading volume," Sean Dunlop, director of financial services at Morningstar, told MarketWatch.

Tenev also worked to build up Robinhood's subscription revenue through its Gold product. Robinhood Gold started as a premium add-on for customers who wanted access to margin trading and level-two market data, but Tenev decided to take the Amazon Prime route and add more value to get people to sign up for its paid subscription.

Robinhood initially drove people toward its subscription by offering subscribers a high annual percentage yield on uninvested cash. This only became possible as the Federal Reserve raised interest rates to combat inflation in 2022.

The company kept adding more products to its platform and services to its paid membership. This included things like stock lending, a dedicated crypto wallet, 24-hour trading, lower margin rates and even a credit card made of gold. Robinhood launched campaigns to get people to sign up for its Gold subscription, including matching funds deposited to retirement accounts or adding a 1% boost to brokerage-account deposits.

The new features brought many retail traders back to Robinhood, many of whom still had accounts on the platform. By 2024, the company's user base started growing again. The company generated $3 billion of revenue in 2024, up from $1.8 billion, and posted its first profitable year ever. The stock also started to climb.

"It's almost like turning around a big ship. It's really slow in the beginning to turn," Acheychek said. "A lot of people ended up talking about getting away from [Robinhood], but it's a hassle changing brokerages - it's a real pain."

As retail traders returned to the Robinhood platform, they also came back to supporting the Robinhood brand. They flew out to Robinhood's in-person conferences, they invested in the company and they nominated Tenev for awards.

Now, Tenev is focused on assets associated with the transfer of wealth from baby boomers to their millennial and Gen Z offspring. He's also working with the Trump White House on its "Invest America" initiative to provide brokerage accounts with $1,000 of investible cash for every child born in the U.S., setting them up to be retail investors from the day they enter this world.

As each new generation starts participating in the market, Robinhood wants to be where they go to invest.

"I think retail investors [have] confidence in Vlad," Bruni said.

-Gordon Gottsegen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 27, 2025 09:30 ET (13:30 GMT)

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