Robinhood
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Finance
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Feb 20, 2024
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pptx
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12
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ROBINHOOD
The GME Scandal
Introduction/Overview
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The actions of Robinhood during the surge in the stock of GameStop (GME).
◦
Key individuals, issues, and facts
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Company Background
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Situation/Timeline
◦
Implications
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Suggested Actions
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Consequences
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Conclusion
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Founded in 2013 (co-founders Vlad Tenev and Baiju Bhatt)
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Mission: "Provide everyone with access to the financial markets, not just the wealthy"
◦
Mission Statement: "To democratize finance for all"
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After 75 investor pitches, company found a few willing venture capitalists. Now it has over 2 million users and is valued at about $1.3 billion. (Business Insider)
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Rapid growth driven by friendly interface and accessible financial services
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Increased competition among brokerages and influenced changes in the way financial services are delivered to retail investors
Company Background
Mazarakis, A. (n.d.). The founders of Robinhood, a no-fee stock-
trading app, were initially rejected by 75 venture capitalists - now their startup is worth $1.3 billion
. Business Insider. https://www.businessinsider.com/robinhood-app-vlad-tenev-
founder-free-stock-trading-valuation-2017-7
Situation
◦
Unprecedented surge in GME stock in January 2021
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Collective effort driven from retail investors & online forums such as Reddit's "WallStreetBets"
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Robinhood imposed restrictions on trading resulting in public outcry & market manipulation accusations
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Ultimately led to 3 major problems
Timeline
Late 2020
Retail investors on Reddit's "WallStreetBets" begin to target GameStop stock, recognizing that it had been heavily shorted by institutional investors.
Jan. 2021
GameStop's stock price experiences a meteoric rise, driven by coordinated buying from retail investors
27 Jan. 2021
Several online brokerage platforms, including Robinhood, restrict trading on GameStop and other volatile stocks, citing the need to manage risk.
28 Jan. 2021
Robinhood's CEO, Vlad Tenev participates in multiple media interviews to address the trading restrictions and defends the decision
29 Jan. 2021
The trade freeze and its consequences continue to be a topic of public debate, Congres
sional hearings, and legal actions.
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Related Questions
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A. Finance companies 8, Mutual funds C. Pension funds D. Investment banks E. Savings banks
2 Which of the following do not have corporate stock ownership?
A. Commercial banks B. Savings and loan associations C. Savings banks
D. Credit uniong O All of the above
3. A financial institution that raises funds by issuing shares to the public and invests the proceeds in a
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A. Banks B. Pension FundyC)Mutual Funds D. Financn companies E. None of the above
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Hello,
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QUESTION 28
The business risk of a firm refers to the ____.
a.
influence of government regulations on business earnings
b.
results from using fixed-cost sources of funds
c.
variability in the firm's operating earnings over time
d.
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F1
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Please explain the photo attached
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Tutorial Questions
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www
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mwv m
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12)
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FINANCE2A
First Question
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mahi ig makipag kwentuhan o
siKReto na iba.
13
Nature, Purpose and Scope of Financial Management
15. Besides maximizing the wealth of the firm, what are some of the other
goals of financial management?
Multiple Choice Questions
What is the primary goal of financial management?
Increase earnings
Maximizing cash flow
Maximizing shareholders' wealth
d.
1.
a.
b.
bal
с.
Minimizing risk of the firm
xal
Proper-risk return management means that
the firm should take as few risks as possible.
2.
a.
b.
consistent with the objectives of the firm, an appropriate trade-
off between risk and return should be determined.
the firm should earn highest return possible.
the firm should value future profits more highly than current
profits.
с.
d.
Which of the following is not a major area of concern and emphasis in
modern financial management?
Inflation and its effect on profits
Stable short-term interest rates
3.
a.
b.
C.
Changing international environment
d.
Increased reliance on debt
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SEE MORE QUESTIONS
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Recommended textbooks for you
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
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