How retail investors win with Robinhood’s earnings calls, IPO tool
00:00 Speaker A
I’m watching this call. I was tuned into uh, Vlad’s X account. You had it outside. You took questions from retail investors. Like, bring me inside like the thought process on democratizing an earnings call because anyone that follows my work the past 20 years, they know earnings call innovation needs to happen. I’m tired of this crap shift. I mean these executives come up, they read this stuff off a piece of paper and they keep it moving. I mean they are not speaking to the retail investor.
00:26 Speaker B
I I love it. So, when we went public five years ago, everybody told us, hey, earnings is a chore, it’s hard, you just got to get through it. We brainstormed and we said, how do we flip it on its head? How do we make it exciting for investors, for customers? So the first thing we did is we made it live, which not many companies do. Uh then we put it on video, then we decided, hey, why don’t we also have an audience? And so now we have investors, we have analysts, we have press, we have retail customers, so everyone is represented. and to make it even more fun, we said, let’s try it outside.
00:54 Speaker B
The main thing is you want you want to be public to not to be a chore. You have to mix it up. This is our 20th earnings call as well. But you also want to meet customers where they are. So, I’m really glad you enjoyed it. you got a little peek into our headquarters and how we operate. We take things seriously, but we also have fun. And our hope is more companies adopt some of the uh the things we’re doing.
1:11 Speaker A
I think that really, I really enjoy what you guys talked about on the call on Robin Hood’s exposure to some potentially big IPOs this year. I mean, there’s a lot of talk about Open AI and SpaceX. How would those debuts change the the business complexion of a company like Robin Hood in any one quarter?
1:30 Speaker B
So, we have a product called IPO Access where we let IPOs come directly to the retail consumer. We actually built this for our own IPO about five years ago. And when we started, it was really hard to get some of these big companies to join. It was Vlad and me hustling and and it was pulling teeth. Now what we see is the opposite. Pretty much every IPO of consequence decides to use Robin Hood’s platform. And so we while we can’t comment on one any one IPO, what you are seeing is we’re getting calls from CEOs and CFOs saying,
1:58 Speaker B
What should my retail strategy be? How do I engage with retail? We want them to be have a seat at the table. And it used to be you gave 5 to 10% of retail. Now it’s 20%. Now we’re getting calls and can you do 30% or even more. So we’re super excited about the product. I think customers are excited to try to invest in these companies and uh it’ll be really great to see which ones use our platform this year.
2:15 Speaker A
That really would change the dynamic of investing. I mean, we’ve seen the rise of the retail investor really the past decade, but the ability for them to get to have that percentage of some of these really big household names. I mean that is real fundamental change to markets.
2:28 Speaker B
100%. So, if you look at today in the US equity markets, it’s actually 25% retail already. That is phenomenal. This the Fed does a study every year to show how many households participate in the US equities market. About 10 years ago, it was 40%, today it’s closer to 60%. A lot of people call this the Robin Hood effect. It’s the greatest wealth creator in human history and allowing retail to participate is what we’re working on.
2:50 Speaker B
To your point, some of these AI companies are now approaching valuations in the trillion and they continue to grow. So if we can give customers the ability to access the IPO, that’s phenomenal. And we’re already working on our next fund to allow customers to invest in even, even earlier stages. So we want retail to have a seat at the table from the seed round, the late stage growth, and also the IPO as well.
