The Robinhood Debacle: Unprepared For Success

February 10, 2021

Venture capitalist Mark Cuban knows a few things about being a disrupter. The reality television personality has never shied away from breaking the mold and charting a new path. However, in an interview with our founder, Cuban was very critical of one of the most prominent disrupters of 2021, the zero-commission Robinhood trading app, after that app become Ground Zero for major stock market shake-ups.

Cuban told Proven Media Solutions founder Dustin Siggins, “All zero-commission brokers [must] pass a stress test. Those that can’t are limited in the number of customers they can have and how much they can trade.”

The company caught the critical eye of investors and the Securities & Exchange Commission alike when retail investors organized on social media found their trades halted by Robinhood’s alleged decision to protect vulnerable Wall Street financial partners. The platform that had boasted of its goal “democratize Wall Street” was unequipped to handle volatility and was accused of siding with its hedge fund investors over the little guy.

In a series of interviews, Dustin found many successful investors shared Cuban’s concerns. A platform like Robinhood that doesn’t take a commission on trades still has a duty to be transparent about its weaknesses and financial relationships. And for every small business owner, the Robinhood story shows that growing too fast can, indeed, be a sad reality when unexpected disaster hits.

Read the full article here.

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