Is the stock market only for the wealthy? Surely, not! With Robinhood Markets, everyone gets a piece of the cake!

The stock market still fosters a certain hierarchy in who gets access to the stocks. Regardless that we’re far away from having a class separated society. However, the part in finance doesn’t agree with liberal access to every stock – money still defined the access.

So it was until Vladimir Tenev and Baiju Bhatt decided to act on the real cause. These two mathematicians developed a stock market called Robinhood Markets that allows every person to get access to the stock market, and profit, not just the rich ones.

These Robinhoods politics puts equality over money, where every person stands a chance to consider investing the stocks. Sounds compelling, but is it really when money stands on the other side?

Let’s read about the two young men who challenged stereotypes by creating Robinhood Markets.

The Road to Riches

Vladimir Tenev was born in 1986 in Varna, Bulgaria where he lived up to his fifth year. Afterward, his family moved to America. Vladimir was brought up in a family of two economists working for the World Bank. Economy or entrepreneurship runs in his blood along with maths.

He spends his teenage years at Thomas Jefferson High School for Science and Technology in Fairfax County, Bulgaria. Although teenage years outline a period of partying and chilling with your friends, Vladimir always found a way to his interest in maths in between.

He worked hard at high school, and ultimately he knew where to continue his education journey – Stanford University. There was always something more that appealed to Vladimir, and that was the urge to create something big, something life-changing.

Roommates Turned Partners

Vladimir opted to continue his studies at Stanford University to study mathematics. At this prestigious university, Vladimir excelled in his knowledge for what he earned himself a degree in mathematics. Vladimir’s enthusiasm for mathematics leads him to the master’s program at the University of California in Los Angeles. He successfully finished his master’s studies and enrolled in individual research to get his Ph.D.

While he was doing his research and prepping up his dissertation, Vladimir meets Baiju Bhatt – his future Little John. Meeting him is just the exposition of this story. They became roommates, as both of them studied at the same university.

When they started living together, both Vladimir and Baiju realized they had a lot in common. Both of them wanted to take initiative and move towards something big. Baiju already had a clue and invited Vladimir to join him and build software for high-tech trading. Vladimir decides to drop out of his Ph. D studies and move along with his friend. Baiju suggested starting in the heart of traders and new companies - New York.

The Wolves of Wall Street

So, soon after, Vladimir and Baiju packed their bags and headed for New York City aiming to settle at Wall Street. The first thing they did once they reached the Big Apple was they started two finance companies and began selling their own software to companies to make funds. Both mathematicians started a finance company in the greenbacks capital – New York City. During their adventure, both of them noticed that the poor paid much more commission, while big companies paid much less because they had one leverage – money.

After some time they spent in New York, Vladimir and his new partner noticed that the big companies on Wall Street paid a few bucks to trade stocks, while the majority of Americans were charged a commission for every single trade they did. All of that seemed a tad unfair to Vladimir and Baiju.

Noticing this injustice, both Vladimir and Baiju decided to reset the game. So, they headed off to Cali to create a financial product where every citizen, regardless of how poor, can get access to financial markets.

Shaking the Stock Market

In 2016, Vladimir and Baiju set new trends on the stock market just by their appearance alone. Robinhood was made as a shocking fee-free revolution that grew popularity in a nick of time.

As opposed to the traditional share companies, Robinhood doesn’t charge fees for opening an account, nor does it require you to have a minimum deposit amount. Buyers can buy fractional shares at Robinhood, meaning they can set an amount of buying a small share they can afford. Yet, what Robinhood charged the stock rules the most is the free trades.

Up to now, the stock market had a regular price of trades about ten bucks, but all that ends with Robinhood.

To make their idea possible, Vladimir and Baiju needed funds, and they had to make some funds from somewhere. The commission influx of money is everything they stay against.

Thus, Vladimir and Baiju profited by selling their trades to big market makers, sophisticated quantitative trading companies such as Citadel Securities, Two Sigma Securities, Susquehanna International Group, and Virtu Financial. The large businesses would pass Robinhood consumer orders into their algorithms, hoping to benefit by trimming a tiny percentage off bid and offer prices.

How Did They Catch Attention with the IPOs?

Being an innovative company comes with great responsibility. After they announced their idea, Vladimir and Baiju had to oppose the highly competitive market including names like E-Trade and TD Ameritrade.

To focus everyone’s attention towards Robinhood Markets, Vladimir and Baiju set out a waiting list of 50,000, to begin trading. The exclusion strategy brought them even more interested stock buyers, which only meant good news for their debut day.

Enter Robinhood!

Right after they started their company the stocks fell right away. Instead of the huge boom everyone waited for, Robinhood stocks fell. Such a miserable debut is every entrepreneur’s nightmare, especially the one that deals with stocks.

Soon after the stock meltdown, many shareholders started retreating from the Robinhood that only worsened the situation. After many employees or investors may have been hanging their hands with such a miserable IPO debut, other companies that envied Robinhood stocks laughed the loudest.

The problem became clear by the end of its first day, with the Robinhood stock (HOOD) finishing 8.37% below its IPO price. This caused many integral companies to shut down on their debut day.

Everything seemed horrible at this point, and the company wasn’t facing a happy ending. It was because this wasn’t the climax of the story, but the turning point where something unexpected happens.

A day or two later, the company’s finances started rising, jumping from 24.2 percent to $46.80 a share, well above the $38 IPO after the terrible start. But, that’s the thing about stocks, not everyone can predict the ending, and those being happy about the Robinhood failure soon realized the power of innovation.

Five Years Later

Robinhood stocks skyrocketed, and many people who weren’t considered as rich before made huge profits and lived up to that name. However, because the company made millions of funds, they are facing lots of charges for not being in the clear of running their business.

Before taking the finance world by storm, Robinhood had to repel some fierce competitors like Fidelity, Acorn, and E-Trade, among others.

Later, the media cast Vladimir out as the villain in this entire story, but they had nothing on him except being rich and one of the finest minds that reiterated the stock market rules.

The bottom line is, Robinhood Markets had received numerous awards for its innovation, but the Apple Design Award they’ve won in 2015 is among the most memorable ones. It was the award that ignited this entire journey.

Today, Robinhood Markets Inc. is headquartered in Menlo Park, California, providing work for more than 1280 people, all working towards making sure Robinhood stays true to its principles.

Making the stock market a playground for all, not only for those with deep pockets, made Robinhood a true financial hero of today!