RETAIL Investors Are Now Wall Street’s ELITE

0:00This is an iHeart Podcast. Guaranteed Human. Hey, Ernest, what's up? One thing we always say on this show is you've got to be intentional with your money. Because it's not just about how much you make. It's about how you manage what you spend. Exactly. That's why tools like Clonar are interesting. It gives you flexibility when you're making purchases. When you're checking out, you can decide how you want to pay. Whether that's paying right away or spreading payments over time depending on what works for you. Everything's organized in Klarna app, so you can track your spending in one place. And when you shop through the app, you can find deals and earn cash back with participating partners.

0:42Download the Klarna app today or visit Klarna.com to learn more. California resident loans made or arranged pursuant to a California finance law license. NMLS number 1353190. Klarna balance account required to be eligible for cash back points. Limitations, terms, and conditions to buy. The world is transforming faster than ever, and standing still isn't an option. At Oppenheimer, we're working at the forefront of the innovation economy to invest where progress begins, finding opportunities that build and protect wealth for individuals and institutions that want a seat at the edge of tomorrow. Put the power of Oppenheimer Thinking to work for you.

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2:51Picture-perfect patios and good food? Yes, please. Our best lineup is here at Lowe's. Valid through 3.30. While supplies last. Selection varies by location. Pay for offer exclusive. Ask in Hawaii. When we first met, it was just before the idea of the meme stock, which obviously your platform got a lot of flack for. And it was, oh, the retail traders don't know what they're doing. And then we saw you speak and we met again. And it was the idea of like the retail trader is the sophisticated trader. Yeah. Talk about the role and how that's transpired over the past two or three years to now that everybody's in on it.

3:29Like, hey, the retail is where we can get a lot of our customer base from because they have the tools. I think companies are waking up to this. You know, we were relatively early to embrace the retail trader because the retail trader is our customer. So, of course, we have a natural incentive as a company to have our customers be shareholders, right? Because not only are they our shareholders, but they're people that use the product every day. You know, our product is a stock market investing product at its core. And one of the things I'm very proud of is the work that we've done on IPO access.

4:11I mentioned you guys a little earlier. It's my second trip to New York this week. First time I was at the New York Stock Exchange on Tuesday at a roundtable called Make IPOs Great Again. It's a funny name. They had the red hats, too. Which, by the way, the idea that the administration and the regulators are coming to Robinhood as a representative of the retail investor to collect feedback for how to make capital markets and IPOs better was something that probably I wouldn't have imagined. the first time we met in 2022. So pretty crazy how quickly things can change. But when we went public in 21, we rolled out this product called IPO access.

4:55And the idea was not just have IPOs be for the chosen few, the elites, the high net worth, the private wealth folks, and obviously the institutions. But how do we plug Robinhood investors directly into IPOs and get them allocations at the same price on a level playing field with the institutions. And so our IPO at the time was, I think, the largest IPO retail allocation for an IPO of its size. And we tried to get other companies on board. We got some, but they were very skeptical and reluctant. You know, some people actually, to be fair, really bought into it. But most companies, we had to ask for favors and, you know, they would throw us a few scraps, like we'll give you half a percent of the IPO allocation.

5:44So we really asked for favors and people didn't really get it. They're like, what's the point? I'm just trying to take my company public, go through the process, get it over with so I can get back to running my business. They didn't really see the point. And fast forward to 2025 this year, when the IPOs have come back, every company of consequence has basically come to us and asked, let's talk about our retail strategy. How do we get retail more engaged? And you've started to see the CEOs of those companies when they're doing their press about the IPO, talking about how retail is a big constituency and saying, you know, in the case of a bullish CEO, we give retail 20 % allocation.

6:25It's one of the largest retail allocations ever. Gemini CEO, the Winklevoss Wins, gave a huge retail allocation. And, you know, now it's completely shifted where retail is definitely being a first class citizen. So what we're trying to do is push that forward, go deeper into IPOs and continue the leadership we have there. Post IPO, we want to make the brand of being a public company a little bit better. I don't know if you guys have, I'm sure you talk to a lot of entrepreneurs, some of whom are public. generally the perception and the way they talk about being public is negative. We have to be public, but I hate earnings calls.

7:07I hate this. I hate that. It's a chore. And what I'm trying to do is shift it into being a positive thing. So rather than thinking of your earnings calls as a chore, how can they become fun? Can you as the executive have fun during earnings? And also, can the audience actually enjoy watching it? So we've been investing a lot in actually making our earnings calls, not just informative, but entertaining. So for the last one, we did it at the Chase Center, home of the Golden State Warriors. And we not only had the sell-side analysts, who's the typical earnings audience, but we had buy-side investors.

7:46We also had the media. So the media was at our earnings calls, and everyone could ask questions on a level playing field. We had retail investors via Zoom asking questions. And then, of course, the whole thing was televised. So it was on live stream on social media. And go back a year ago, our earnings calls were on a polycom, audio only. We had maybe like hundreds of people listening. And now it's gone to tens of thousands. So orders of magnitude increase in the audience for earnings. And now we're starting to actually export this as a product to other public companies. So Opendoor, for example, they saw what we were doing.

8:26They said, we want to engage retail. We want retail to be our number one constituency. So we work with them to live stream their earnings to our audience in the Robinhood app. And we've heard from many people that they'd like to start doing this. So I think you'll see earnings calls becoming fun. and I think the brand of being a public company start to shift into a more positive thing. And also on the other side of the spectrum, before a company is going public, when they're still private, we're hard at work trying to get retail exposure on the private side and making that a little bit easier.

9:01We have a great initiative called Robinhood Ventures, which is going to be in the US and we're launching a closed end fund that's on file with the SEC right now. So we're actually in the quiet period. I can't talk much about it, but the idea is make it so that retail investors can invest in the best private companies before they go public. So we're kind of tackling it across every part of the spectrum. Hey, Ernest, what's up? One thing we always say on this show is you've got to be intentional with your money. Because it's not just about how much you make. It's about how you manage what you spend.

9:39Exactly. That's why tools like Kloner are interesting. It gives you flexibility when you're making purchases. When you're checking out, you can decide how you want to pay, whether that's paying right away or spreading payments over time, depending on what works for you. Everything's organized in Klarna app, so you can track your spending in one place. And when you shop through the app, you can find deals and earn cash back with participating partners. Download the Klarna app today or visit Klarna.com to learn more. California resident loans made or arranged pursuant to a California finance law license.

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