Online brokerage platform Robinhood has hired former Google executive Aparna Chennapragada as its first chief product officer as it gears up for a high-profile IPO.
The tech industry veteran spent 12 years at Google and was most recently vice president for consumer shopping. She previously led product, engineering and design teams at the Silicon Valley giant, with a particular focus on Google Assistant, Search and YouTube.
Chennapragada, who is also on the board of Capital One, said: “I spent my career at Google building products that help billions of people in their everyday lives, so I couldn’t be more excited to join Robinhood and help more people build their financial future and personal wealth.”
User Numbers Soar
She joins the company as it gears up to make its public debut. Robinhood’s unique selling point is its lack of trading fees, which helped it rack up 13 million customers by 2020, but it has endured a tumultuous few months at the start of 2021.
Vlad Tenev and Baiju Bhatt launched Robinhood in April 2013, but it really shot to prominence following last year’s stock market crash. Many Americans were stuck at home during coronavirus lockdowns, and they turned to investing and trading on Robinhood. Many customers made significant gains thanks to investments in hot tech stocks such as Tesla.
Robinhood then found itself at the center of the short squeeze drama in January 2021. Reddit and Twitter users banded together to buy up stocks in struggling companies such as GameStop and AMC, with the intention of performing a short squeeze on hedge funds that had bet against those companies.
It was all going swimmingly for the investors, until Robinhood restricted the trading of those stocks, leading to an outcry. Everyone from Ted Cruz to Alexandria Osacio-Cortez lambasted Robinhood, as the price of the stocks plummeted and many retail investors were hit hard.
All Publicity is Good Publicity
The company was accused of market manipulation, and it was hit with several lawsuits, but Tenev insisted that the restrictions were the result of clearinghouses raising the required collateral for executing trades on those stocks.
Yet many still felt that Robinhood had caved into pressure from Wall Street, as it is paid by market makers such as Citadel Securities and Virtu for the right to execute consumer trades on its behalf.
“Pro tip: don’t call yourself Robin Hood if you are going to turn your back on the folks in Sherwood forest after one phone call from the Sheriff of Nottingham,” quipped one Twitter user.
Despite the controversy, user growth, brand recognition and valuation apparently received a boost thanks to the publicity. “Despite some positive and negative press, everyone in the world knows who Robinhood is,” Greg Martin, managing director and co-owner at Rainmaker Securities, told CNBC. “They couldn’t have better free advertising.”
Analysts therefore still expect a hot Robinhood IPO. It was last valued at $11.7 billion, but it is expected to receive a valuation four times higher than that when it goes public. “Robinhood has built a uniquely accessible product that has opened up the financial markets to millions of people,” said Chennapragada.