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Opinion | Who Wins in a Meme Stock World?

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(SINGING) When you walk in the room, do you have sway?

[MUSIC PLAYING]

kara swisher

I’m Kara Swisher, and you’re listening to “Sway.” Trying to democratize Wall Street is nothing new. Online trading companies like E-Trade have been around since the ‘80s. In fact, I rang in Y2K at its offices, waiting to see if its system would melt down. It didn’t. History repeats itself, and amateur trading has come back in a very big way. Retail investing skyrocketed during the pandemic, with more than 10 million new brokerage accounts in 2020, the most ever in a year. And trading by individuals made up a bigger chunk of the action than at any time in the past decade. And the root of it all? Apps like Robinhood or Public, the latest retail trading unicorn. Public is part brokerage and part social media. That could be a genius mashup or dangerously court the worst of both worlds. I wanted Public C.E.O. Jannick Malling’s take on the responsibility retail trading apps have to the individuals who are risking their savings and incomes. It’s a question that seems especially important in the context of a frothy market rife with meme stocks like GME, A.K.A. GameStop. Thanks to online forums and retail investors, the struggling video game retailer saw its stock shoot up way beyond its suspected fair value, hitting a peak in January of 2021. It’s come down since, but who knows what will happen next, and how it will impact these newbie investors? So I asked Malling, is the ability to invest with a swipe of your finger inclusive, or is it predatory, leading less experienced investors astray at the whims of Wall Street?

jannick malling

I think investing is about long-term ownership in companies and not about a quick gamble. So I think when you’re trading stocks, in and out of stocks in the same day, the same week, or even the same month, you’re not really doing it with a long-term view, obviously. And so you’re not necessarily doing it to back the company. And so we’re really focused on the investing side of things, not really day trading. So 90% of our members are longer term investors, right? They transact a handful of times per month. And I think this whole situation that happened on January 28th or that sort of had its climax, if you will, on January 28th —

kara swisher

You are talking about GameStop and what happened. It’s a series of retail stores, right?

jannick malling

Yep.

kara swisher

And it’s been in the $4 to $6 range, essentially. And now it’s around $160. But it jumped because traders moved in, including retail investors. Talk about this idea of meme stocks. What happened here?

jannick malling

The interesting thing is I think the term “meme stocks” really comes from just the fact that it happened on social and that the majority of people sort of piled on in the end. It’s a little bit like a product life cycle curve, right? There is actually a real thesis there for somebody underwriting GameStop at the level that it’s trading at now and even beyond that, right? Because on the one hand, yes, it’s a retailer during Covid. On the other hand, you’ve seen many examples of companies that sort of are able to reinvent themselves. And I think in the end, where people are divided is, is GameStop Blockbuster, or would they actually — like, there’s also an argument to be made that Blockbuster could have become Netflix, right? If they had pivoted a little bit earlier. And —

kara swisher

If only they had been Netflix, but go ahead.

jannick malling

Well —

kara swisher

Can I tell you, I covered the end of Blockbuster and the beginning of Blockbuster? They never could have been on Netflix. But go ahead. Go ahead.

jannick malling

And obviously, remains to be seen whether that’s going to be the case. But then you had folks like Ryan Cohen kind of going in, the Chewy founder. And I think all those pieces of the puzzle meant that people really actually believed in it. Then they started investing.

kara swisher

So what did you think about it taking off like that? Because that’s way beyond the thesis, right? It was around $17 to $480. That’s way beyond, “this is a good stock.”

jannick malling

100 percent. And this goes back to the product life cycle curve that I talked about, where you always have early adopters, and then you have key people that kind of pile on in the end. Then they also realized there was a short — a massive, oversubscribed short interest, if you will, which set up the opportunity for the short squeeze. I mean, look — I think regardless of whether people made money on that single trade, where we’ve been focused on, and what we frankly seen, which make us incredibly hopeful for the future, is that it piqued interest, as far as the markets go. And I think the markets — I mean, basically — especially with the sort of Millennial and Gen Z generation — have historically had a little bit of a bad rep growing up with the financial crisis and all that.

kara swisher

GameStop — the reason I’m talking about it is because it reveals some screwy incentives facing your industry. What do you think happened there?

jannick malling

What I do believe is that you gotta — similar to in the way of ‘08 a little bit, actually, you got to sort of reset your risk management principles, maybe, and rethink how you actually do that. Because we live in a world today where there just can be clearly a massive rise and a massive amount of concentrated buying power in a single security.

kara swisher

The GameStop story has been spun as a win for the little guy, and lots of GameStop is owned by giant asset managers. A bunch of hedge funds cashed in on the surge, and you know there was all kinds of behavior like that. At the same time, a lot of beginners lost money because they didn’t know how to ride the wave. And they had all these sort of rich guys — a lot of them I know very well — saying, “Hold, hold, hold. Keep going.” And of course, they got out. Do you see this as a victory for retail investors, or do you see it as a warning story? And maybe it’s something in between. But how do you look at it?

jannick malling

Maybe it’s both, right? In the end, I think there was a moment of celebration in there, which was not necessarily about the profit or the money. I think it was more about —

kara swisher

Screw the man, kind of thing.

jannick malling

Well, I think where the institutions were no longer the only ones in power. Historically, that has been the case on Wall Street, everybody kind of knows it. And I think now you’re starting to see the pendulum swing in the other direction, which I think is interesting.

kara swisher

Did it swing, really?

jannick malling

I think a lot of people — I mean, if you watch “CNBC” and “Bloomberg” on a daily basis, I think a lot of people are watching their words much more carefully when they talk about retail investors now, and certainly when they talk about certain forums on Reddit and whatnot.

kara swisher

Yeah, they’re not calling them idiots anymore, right?

jannick malling

Exactly.

kara swisher

One of your biggest competitors, Robinhood, got a lot of heat for shutting down trades of the stock GME, GameStop, for the entire day, Public didn’t stop trades of GameStop when Robinhood did, for example. But you eventually added a safety label to the stock, which is a little like Twitter introducing a misinformation label on a Trump tweet. Why stop there? Why didn’t you stop trades?

jannick malling

Well, so our clearing firm did actually take GME offline for a couple of hours, in full transparency. We disagree with that decision ourselves, but we do work with a third-party clearing firm. And so we worked with them very quickly to get that back up. Safety labels is actually a feature that we built initially in and around the Hertz episode in summer of 2020. So to explain the feature really quickly, any security that’s deemed as being risky by the S.E.C. guidelines, we put a label on there, and it gives you a little speed bump where you actually have to swipe through, just like an additional hurdle before you place the trade.

kara swisher

Yeah. So you have disabled trading for a certain sec — Hertz in the summer of 2020.

jannick malling

Yep. So what we saw at the time was pretty unprecedented in that Hertz filed for Chapter 11 bankruptcy, and then the stock shot up like 700 percent, 750 percent, I think. And a lot of people were not necessarily really understanding of why the stock was going up or even knowing that Hertz was actually going bankrupt. And so we took the temporary decision to halt the buying of Hertz shares. So obviously you could have still sold some if you had already bought some. It’s a little bit no different to how some of the exchanges do it when there’s too much volatility in a single security. And then we very quickly developed the safety labels feature. We didn’t have that at the time. Had we had it, we’d probably just slap that on it. But again, we really do not want to be a place where people come in and get burned. Because a lot of people are having their first interaction with the stock market ever on Public. And obviously it’s an incredibly tough balance to navigate because it’s a free country. People are free to do what they want —

kara swisher

Sure. So like you mentioned, it sounds a little paternalistic. If I want to sink my money, isn’t it my choice to not know things, not the choice of the brokerage? And things are looking up for Hertz right now, by the way. But talk a little bit about that. Because I think there’s a lot of debate when Twitter did it and Facebook didn’t, for example. There’s either take it down or not. But how do you think about that idea? Because people in the stock market are like, it’s my money, my choice.

jannick malling

Well, I think the paternalistic thing would have been to take it off completely and just keep it off. We sort of ended up where — is there something that we can design in the UI, in the UX, where it becomes — call it five taps and a swipe, and just like ways to really present the information in context at the time of action to at least make sure that people have a greater sense of what they’re really getting into.

kara swisher

So when Robinhood stopped trades of GameStop, one theory was that it had succumbed to the pressure from Citadel Securities, the market-making side hustle of Citadel Hedge Fund. That was not borne out. But now there’s increased scrutiny on payment for order flows. That’s a common practice in brokerages, and it’s where Robinhood makes their money. Everyone always says free trades, but nothing ain’t free. So explain PFOFs.

jannick malling

Yeah. So payment for order flow, or PFOF — I think the simplest way to explain it is, it’s a practice by which brokerages get compensated from routing customers’ orders to be filled by market makers instead of in an exchange. And I think most people that think about the stock market generally think about the Stock Exchange, and so they maybe just assume that all the orders go there to be executed directly. That historically has not really been the case for the last decade or two. They’ve been going to market makers like Citadel, like VIRTU, and others. We took the stance to actually start routing all orders directly to exchanges and get out of payment for order flow. And we did that because we think that it sets you up with — it kind of misaligns your incentives versus your customers as a brokerage, right?

kara swisher

Because the customers could actually get a worse deal, presumably.

jannick malling

Well, I think as a company, you’re incentivized to have your users trade a lot. And I think historically you’ve seen that the best way for people to — for most people, at least, to invest is not to trade a lot. And that is a lot of the ethos that we’re building Public around, really like sound investing, um —

kara swisher

Meaning, please don’t use our service, essentially.

jannick malling

Meaning, not allowing day trading, not offering margin credit — which is the ability to trade on a loan, which also means that you can lose more than your initial deposit. Meaning not offering options trading, which is a fairly complex instrument where you’re betting on not just direction but direction within a certain period of time, which just makes it much more risky relative to taking a long position on a company where you’re just bidding on direction, and you can sell it at any point in time. And I think on options trading you make 5 to 10 times more per user, roughly.

kara swisher

So it’s an incentive. It’s not unlike, say, social media companies where some people think they don’t take hate off the platform because it’s good for engagement and it keeps people going.

jannick malling

Yeah, a little bit like how you want to keep going with engagement. I think where we came out on this is like, look, the risk of companies overly relying on payment for a flow as a revenue stream is that it impacts all the other decisions you make. So if you then think, how do I maximize my revenue from payment for order flow? You will — your product roadmap naturally starts to incorporate things like giving people margin credit so they can sort of boost their trades and use their trades, if you will. So you make more money per trade, right? Giving people options trading, because that’s more lucrative on a payment for order flow basis than just buying of physical securities. And at the end of the day, like I said, we’re really more beholden to our customers versus third party market makers, and tipping is then what we kind of rolled out.

kara swisher

And this is giving you, like — here’s a dollar for doing that trade for me, thanks, kind of thing.

jannick malling

Exactly. Which is completely optional, of course, as sort of implicitly — or implied, in the word “tipping.” But yeah, what we like about the model is we then capitalize on the goodwill of the community. And obviously there is a cost to actually trade. Today, it’s very low, but it’s still there. And so we did want to find other ways of offsetting that cost of clearing those trades. Again, it’s a little bit like — we do believe that the future is going toward sort of a more transparent market structure. Right now, there’s — historically in the industry, retail participation was 10 percent of volume, and that grew to I think 20 percent in 2020. Now it’s arguably at 30 or 40 percent, some people are even saying. And that actually means that some of the market structures in and around the core market are starting to be really outdated. And that becomes kind of troubling at a core level.

kara swisher

Right. All right. Let’s talk about responsibilities and the business model a little bit more — about democratizing access, this idea of what we were just talking about, rewards. The flip side is enabling risky decisions, which can have fatal consequences, financially or literally. Last summer, which I’ve written about, a student at University of Nebraska, Alex Kearns, committed suicide after mistakenly thought he had a negative $730,000 balance on Robinhood. How do you stop these tragedies from happening?

jannick malling

Yeah. What happened with Alex is obviously horrible. I think — first off, it depends on what products you’re offering. There’s a big, big difference between just offering the ability to buy stock in a company, plain and simple, and then margin trading — which is the ability to take out a loan which you invest — or then options trading, right? And I think in the two latter scenarios, your account can end up going massively negative.

kara swisher

So you’re being very diplomatic. You know, Robinhood enabled options trading and has gamified it rather a lot for someone like Alex, who wasn’t very experienced. I’ve talked to his family, and he just didn’t know a lot about it.

jannick malling

Yeah, I think there’s a couple of other aspects. Like I said, on Public, your account can’t go negative, because we don’t offer those products. So the way we think about it is at maximum, people can lose all the money that they put in.

kara swisher

Right, that they brought to the casino.

jannick malling

Exactly. Well, even with that, there is a conundrum around learning by doing. On the one hand, it’s the most efficient way to learn. I think that’s been historically proven. It’s a forcing function for financial literacy. On the others, you typically make mistakes in the beginning if you jump in at the deep in the pool. And in the world of trading and financial markets, those can be extremely costly.

kara swisher

Right. So one investor told me it’s like giving a Ferrari to a kid without a driver’s license.

jannick malling

Yeah, that’s a good way to put it.

kara swisher

Should there be a driver’s test for retail investors? Should they have to —?

jannick malling

The way we looked at this problem is trying to solve it in two fundamentally different ways. What’s the cost to actually get going and start learning? And so historically in the markets, you’ve had to buy one full share of stock in a company as a minimum. Which means the smaller retail investor couldn’t even afford to buy into higher-quality companies like Amazon or Berkshire Hathaway, et cetera. And so the result being that they’ve been left to either borrow money to actually afford those companies, or buy penny stocks, for the most part. So that’s why we invented fractional share investing, to allow people to really get started with much, much less. And it was kind of crazy to us, because you see it in the crypto world, right? Crypto was born on the internet —

kara swisher

Not just crypto, but everything is getting fractionalized — real estate, everything.

jannick malling

Exactly. I think when the cost is much lower — you know, you invest 50 bucks and you lose that money, that’s obviously much less dramatic than losing five digits.

kara swisher

I want you to — you’re again being diplomatic — what would Robinhood — should have done? Not had it at all, or given Alex Kearns more education?

jannick malling

I mean, I’m sure also if you ask them they would say that they wish that they could have done both.

kara swisher

We’ll be back in a minute. If you like this interview and want to hear others, follow us on your favorite podcast app. You’ll be able to catch up on “Sway” episodes you may have missed, like my conversation with Reddit C.E.O. Steve Huffman, and you’ll get new ones delivered directly to you. More with Jannick Malling after the break.

So I want to talk a bit about the social media aspect of Public. One of your main features is that you can see what other users invest in. You’ve said the community isn’t about influencing though. What do you mean by that? Because people do tend to look up towards people, and social media is about influe— like, fin-fluencers, I think that’s the word people use. “Fin-fluencers.”

jannick malling

Fin-fluencers, I’ve actually never —

kara swisher

There you go.

jannick malling

— used that term, honestly. I think you can break it down into a couple of different things. So we have people on the app that are real celebrities with millions of followers.

kara swisher

This includes celebrities like Tony Hawk and Will Smith.

jannick malling

Then there’s another group of people which is a lot larger, and they call it financial content creators. And you could sort of see this as more being the middle class, or the creator economy. And those are people that tend to be very, very deep in a specific industry in a specific company. They read all the filings, they follow everything very, very closely, and so they just have a more in-depth look into things than most people. And so I think these financial content creators, they sort of serve as a vehicle, typically within a specific kind of sector or trend, of just consuming all that information and relaying it to other investors in ways that they can more understand. Because all of that content written in the public markets is kind of written for the institutional crowd, not really for people that have a much lower degree of financial literacy.

kara swisher

So you have elements of a social media company, like Twitter or Facebook. You also have elements of responsibility in terms of content moderation. What types of policies do you have around potentially misleading or incorrect information being shared on the platform? Talk about the difficulties of doing this. A lot of the — Wallstreetbets, they’re very anonymous. You don’t know who they are. I keep imagining one of those names is like a well-known hedge fund investor that’s lurking around saying things.

jannick malling

So I think the core problem, you kind of touched on it, is anonymity. And we are a full-stack brokerage platform, but we’re also a social network. And so we have this special feature that no one on the app are actually anonymous. So people, in order to engage in social activities, actually have to go through full identity verification. And what that does is it dramatically lifts the bar as far as people’s behavior, because we’ve actually validated — like, we have your address, your social security number, et cetera. And that ends up creating a very different culture than what you might find on Reddit or other kind of communities.

kara swisher

Talk about the content moderation though, because there still can be misleading — look at Donald Trump. He spent his whole career on Twitter lying, essentially. So how do you deal with that? Misleading information from actual people?

jannick malling

Yeah. We have a couple of tools. Obviously we have a pretty sizable content moderation and customer service team that overlook all that stuff. Additionally, we actually have preemptive words that you cannot say.

kara swisher

Give me a word. Like what?

jannick malling

You can’t say “pump and dump.” You can’t say the N-word, you can’t say the F-word. And so a lot of that is actually from a financial perspective, something that really just ensures that people cannot post those kinds of things. And others is just like — the kind of vibe we want to see in the community, honestly. And then we have bots that continuously crawl everything that’s being posted, runs it, obviously, through ML and AI services to identify what’s being said, and have internal triggers that pop up where we can see, O.K., this is a potentially — post to dig into for X, Y, and Z reason.

kara swisher

All right. So what about your duties of taking things down? Do you think you’re aggressive in this? What would you say?

jannick malling

We actually truthfully haven’t had to be. And I think that comes back to the bar being set incredibly high when nobody’s anonymous.

kara swisher

You’re pretty small. You just hit one million users. You can’t do this on an artisanal basis going forward.

jannick malling

Well, I think you can’t put posts that are aggressive in using certain words or the composition of certain words so that they suggest that people should actually be buying a stock. Because that’s kind of the pump information that you kind of see on there. And so those are the kind of features that we can invest very heavily in that — I don’t know if Reddit or Twitter, whatever, because it’s a very specific use case, and they end up covering a lot of different things. And so that’s one of the things that we kind of see as an advantage, frankly, as far as keeping a clean, nice kind of community where people feel vulnerable enough also that they can actually talk about investing.

kara swisher

How do you think about your responsibility as a curator? Because Public features a short list of companies split into themes. Stay at home, women in charge theme, the SPAC-pack — ha ha. What checks are responsible to make sure you’re not driving markets or profiting off these lists?

jannick malling

Yeah, so each of those lists come with their own set of disclosures, actually. So we don’t put penny stocks in there, right, which are companies that trade for a couple of bucks price per share. Because then your filtering the list to be mostly high quality companies, right? And so the disclosures there are obviously incredibly important. In the case of safety labels, we actually just reference the S.E.C. guidelines. So those are not things that we’re setting. We’re just kind of presenting the information that already exist in a very different way. And so that’s actually how I think about it. When you’re in the front end of those things, you’re able to bring forth some of that information in ways that the regulators actually can’t.

kara swisher

One of the things that’s also a problem is rumors, obviously. Bitcoin and Ether saw huge selloffs recently because of rumors that the Treasury Department was going to crack down on money laundering through digital assets. Are you worried of being exploited as a form for market manipulation, where rumors could carry a lot of weight?

jannick malling

Not really, no. Because I see it very differently. So I think the whole thing about rumors and Wall Street and insider trading — all that stuff, right? Like the Michael Douglas film, et cetera. I think — that was 30 years ago. I think today, the much bigger problem that people have, to your point, is actually there’s so much information out there that you kind of want to make sense of it all —

kara swisher

Although honestly, the old tricks work just fine by the way. Gordon Gekko would do just fine in this market. The dynamic is playing out where people are trading market tips on TikTok and Instagram. There’s even speculation that big hedge funds are hiring influencers to try to bolster their positions in the market. I mean I think they still can play those games, correct?

jannick malling

At a market, sort of, macro-level, yeah, they totally can. I was more a little bit — referring to — I think if everyone was verified on TikTok and whatnot, and all that became out in the open, and it was therefore in the purview of Finra and things of that nature, I think it’d be very different. And so that’s actually, again, where we see the benefit of being a full-stack social network and brokerage, because you put everything sort of under one roof.

kara swisher

Doesn’t mean you’re not going to be affected by them though, right?

jannick malling

It doesn’t. But it means you can connect the dots a lot more. And so we have that power, and there’s a lot of things that we can build around that.

kara swisher

Right. All right. So will you start labeling rumors as that? Do you imagine doing that?

jannick malling

To be honest, I think the community does a pretty good job doing that on their own, so —

kara swisher

That’s very optimistic of you.

jannick malling

I think it comes back to the culture of the community that you’re building. I think, on the one hand — yeah, I realize this all sounds fluffy. But the fluffy stuff tends to be the most powerful stuff when it actually reaches a certain scale.

kara swisher

So stocks aren’t the only thing that people are investing in right now. Non-fungible tokens, or NFTs, which I’ve done some shows on, which are digital assets whose ownership is verified by the blockchain, have become really popular. What do you think of all these alternative assets? And you’ve hinted that crypto features are coming to Public soon. Talk about what that is, what that means, how you look at these cryptocurrencies.

jannick malling

Yeah, I think they’ve been through a pretty big evolution. You kind of had the crypto winter, I think they call it, right? After Bitcoin hit 20K, and then it went down. And now it’s sort of come roaring back for a number of reasons.

kara swisher

I was around when it was 10. But go ahead. Keep going.

jannick malling

But truth be told, I think, as opposed to back then, when it was just seen as this crazy idea, I think now it’s kind of seen as part of the modern portfolio. And so we’re adding just a few coins just to — basically, for people that want to have it as kind of part of their portfolio.

kara swisher

So you’re essentially doing what Coinbase is doing, right? Do you think that is going to be a feature of all these bank — I do. I think Coinbase is kind of screwed in that regard.

jannick malling

I mean, you saw Venmo adding it. PayPal, I think — yeah, I think a lot of people are going to be adding it.

kara swisher

Adding it. Will users be able to trade Dogecoin?

jannick malling

TBD, honestly.

kara swisher

That’s not a “no.”

jannick malling

TBD.

kara swisher

So right now, the ones you’re going to feature are what? What are you going to let people hold?

jannick malling

We’re starting with Bitcoin, obviously, and then Ether. And then we’re working our way down the ladder.

kara swisher

Do you have any Dogecoin?

jannick malling

I don’t, no.

kara swisher

Should I buy some?

jannick malling

That I cannot tell you, Kara. That would be financial advice. Yeah, I think the way people are starting to see it more and more is as an instrument in your portfolio that potentially works as a hedge against some wider market securities, like the S&P 500 and things of that nature. And I think that’s the notion that a lot of people are coming around to. That’s my hunch.

kara swisher

What about Peter Thiel’s notion that it’s going to attack the dollar — that it’s a Chinese plot to kill the dollar?

jannick malling

Well, I mean, I do think it’s attacking the dollar. I don’t think that’s sort of the — think everybody would agree to that. I think the real question is how much China has to do with it.

kara swisher

Oh, he just likes to throw stuff out to bother everyone. And we all are just chewing all over it. That’s what he does.

jannick malling

But I think that the last time you saw any kind of thing happen in the currency world was actually with the formation of the euro, where you had Deutsche Mark going to euro or whatnot, and that had massive consequences. And I think Europe did that in order to have a single currency that could stand up to the dollar a little bit, right?

kara swisher

Maybe Dogecoin — who knows. Who’s to say? That’s what — tonks! I’m just doing an Elon Musk impression. What did you think of that? When you have single people being able to move markets that way and yell “stonks,” or whatever the hell he’s doing. I know him pretty well, and I think he’s just playing games. But part of it is quite serious. When one person has the ability to move people so quickly — it’s a fan-based investing model, in a weird way.

jannick malling

Yeah, I think it’s interesting. I mean, on the one hand, it’s new because the way that the content gets distributed is very different. And all these platforms are not really connected, and there’s a lot of cross pollination going on. And I think — because the way I think it used to work is more secretly, around Bloomberg terminals and whatnot, with the chat. And things could still kind of go viral in their own way. And so on the one hand, I don’t know if the problem is actually new, like at the root level. I think the way that the manifestation of the problem is a little bit different than how we’ve seen it historically. And so it’s very much TBD what ends up happening there. I think he’s had his hand slapped a couple of times, so maybe that happens again.

kara swisher

What is your perspective on government regulation and retail investing? What do you think the S.E.C. will do, and how do you look at it, running your business? Because they’re obviously going to get involved much more heavily in all these areas.

jannick malling

Yeah, but they are already very heavily involved, right? They exist to protect the retail investor. So I think you don’t protect a retail investor by shutting them out. But I also think there is a lot to the argument that a retail investor wanting to invest is really just buying stock in companies. It’s not borrowing money to do it, it’s not doing auctions trading, et cetera. So I can imagine that those would probably be some of the reference points, and then they’ll work from there.

kara swisher

Yeah, I think they will move into market manipulation a little more heavily, in my opinion. But we’ll see. So let’s finish up talking about your business model. How do you make money at Public? What is your business? It can’t be tipping. What are you, a waiter?

jannick malling

We certainly serve. That is front and center of everything we do. So we have a couple different ways we make money. PFOF was one of them. We did obviously abandon that, at least from market makers. So you, additionally, have cash — interest on uninvested cash. Then you have securities lending, which is — you can sort of think of as, essentially, interest on invested cash. And then you have tipping. And so those are the three core revenue streams for us right now. I mean, to your point, we’re only — we’re not even actually live for two years, or so we will roll out more revenue initiatives for sure.

kara swisher

What about selling data? For example, the social graph. Is that in your —

jannick malling

No. That we won’t do.

kara swisher

So Robinhood now is going public. Long-term, are you considering an I.P.O., or a SPAC, or do you hope to get acquired? I suspect you have a lot of banks sniffing around what you’re doing.

jannick malling

Yeah, the SPAC thing is interesting right now, obviously. We’re not considering anything in the short-term. I can say that much, no matter how much SPAC people are out there.

kara swisher

There’s a lot of SPAC people.

jannick malling

I know. So as far as whether we’re going public, not this year, probably not next year. Someday, yeah, maybe.

kara swisher

Is there pressure because Robinhood is?

jannick malling

No. No, not really.

kara swisher

Because? Why?

jannick malling

I don’t see why there would be.

kara swisher

Well, more money, more ability to acquire, more ability to make trouble. I don’t know — lots of reasons.

jannick malling

I don’t know. I think it’s — I mean, look — I think you have comps in the public markets, but you’ve had that for a while. Like E-Trade was public before they were acquired, et cetera. So I don’t know. I don’t see that as a catalyst for anything for us.

kara swisher

O.K. Last question — Public saw a boom during the height of Covid, so did Robinhood, so did a lot of these others. People are at home, they have nothing to do. Some of this is entertainment for people. How do you think about drop-offs in usage? Or you’re not worried about engagement in that case?

jannick malling

Not really, to be honest. Because I think what you see are two very different things, to my point. There’s people that maybe just come in for a single hit and then they’re out. We haven’t really seen that, to be honest with you. And I think that has a lot to do with when you draw people into a community, maybe that wasn’t what you came for, but that’s what you stay for. And so it’s a little bit different for us relative to some of the other brokerages, I think.

kara swisher

I see. Interesting. Jannick, thank you so much. I really appreciate it.

jannick malling

Yeah, thanks, Kara. It was great to be here.

kara swisher

“Sway” is a production of New York Times Opinion. It’s produced by Nayeema Raza, Blakeney Schick, Heba Elorbany, Matt Kwong, and Daphne Chen. Edited by Nayeema Raza and Paula Szuchman. With original music by Isaac Jones, mixing by Eric Gomez, and fact checking by Kate Sinclair. Special thanks to Shannon Busta, Liriel Higa, and Kristen Lin. If you’re in a podcast app already, you know how to get your podcasts — so follow this one. If you’re listening on the Times website and want to get each new episode of “Sway” delivered to you as fast as a Ferrari without a driver’s license, download any podcast app, then search for “Sway” and follow the show. We release every Monday and Thursday. But before you go, we’ve got an event coming up for Times subscribers. I’ll be debating my fellow hosts from Opinion Podcasts, Jane Coaston and Ezra Klein, as well as columnist Farhad Manjoo about the merits and dangers of cancel culture. Comedian Trevor Noah will be weighing in on the subject too. It’ll be on Wednesday, May 12th. Times subscribers can R.S.V.P. at nytimes.com/cancelculture.

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