Even as the potential of a regulatory crackdown on payment for order flow looms as a big danger, well-known investor Cathie Wood is a shareholder in Robinhood (HOOD).
In an exclusive interview with Yahoo Finance Live, Ark Invest’s founder, CEO, and CIO stated that Robinhood is currently a 1% holding for her firm.
Wood threw the stock market for Robinhood into a tizzy in early August after revealing her stock purchases following the trading platform’s poor IPO in late July. According to Yahoo Finance Plus data, shares soon soared to an intraday high of $85 on Aug. 4 as traders who handle every call from Wood’s firm hailed the buy.
“We’re looking at the payment for order flow controversy. We know that chairman [Gary] Gensler at the SEC is looking at that. That’s a large percentage of Robinhood’s revenues. But we actually think that not much is going to change there because the system has been so good from an execution point of view for the end investor. So we would be surprised to see a lot of change on that front. But again, we are in a situation where we have to listen to what the SEC is saying,” Wood told Yahoo Finance Live.
Wood reportedly nibbled at more Robinhood shares this week as they continue to be under pressure on regulatory concerns.
Gensler said in an interview with Barron’s earlier in the week overhauling payment for order was on the table. If payment for order flow is banned — or overhauled in a major way — Robinhood could see its business model upended.
Wood said her call reflects Robinhood’s innovative business and how it has shaped the investing landscape.
“I actually think Robinhood has done a great service to the investing community,” Wood added.
Source: Yahoo News