Good morning.
Finance Editor Jeff Roberts here, with some background on a story about Robinhood CEO Vlad Tenev that’s out this morning. I’ve covered Tenev for years, as he brought his beloved investing app to the brink of failure, but then found a way to change both the corporate culture and himself. This is a story about how he did it.
I first met Tenev almost a decade ago, after he and fellow Stanford alum Baiju Bhatt came out of nowhere with a buzzy app that made it dramatically easier to buy and sell stocks. Backed by Silicon Valley’s most prominent venture capitalists, the duo upended the brokerage industry with commission-free trading–giants like Schwab and Fidelity soon followed–and helped make investing cool among twentysomethings. They grew quickly, going public on Nasdaq in 2021.
You may remember what followed: Robinhood’s IPO quickly proved a bust as stock prices tumbled in late 2021, and shares in HOOD tumbled from $38 to below $7. Meanwhile, many who got burned by the meme-stock craze unfairly accused Tenev and Bhatt of colluding with short sellers. The duo became literal movie villains with Hollywood portraying them as greedy, bumbling party boys in the film Dumb Money.
The pressure resulted in Tenev’s co-founder stepping back from Robinhood, leaving him alone to figure out how to right the ship. In a move few other leaders would emulate, Tenev engaged in a brutal thought exercise: holding quarterly meetings that envisioned him being replaced by a veteran executive like former Snowflake CEO Frank Slootman, who excels at taking over companies in trouble.
“It’s a good way to figure out what things you’re holding dear to yourself,” Tenev told me. “Being inconsistent with a prior decision you’ve made can be interpreted as a sign of weakness. And it’s one of those things that someone new doesn’t have… Because if you can let go of the need to be consistent with past decisions, and just make the right decision at every point in time, it’s easy stuff.”
Tenev is still CEO of Robinhood (it doesn’t hurt that he and his co-founder hold the majority of voting shares). And the changes he wrought in that difficult period—including painful waves of layoffs—have paid off. The company’s share price has more than tripled since its all-time low, while Robinhood is adding products like credit cards and retirement accounts that put it in a position to compete in the long term with the likes of Fidelity.
Meanwhile, a man who once came across as an entrepreneur created by VC central casting has evolved, too. Now a father of three and approaching 40, he is more reflective and willing to define his company and himself on his terms.
All of this for me is a study in focus and tenacity, and how good leaders are willing to grow and rethink their priorities in the name of making their company stronger. If you want to read more about Tenev’s evolution—along with never-reported details about Robinhood’s unprecedented $3 billion capital call and Tenev’s brush with Sam Bankman-Fried, the full feature is here.
TOP NEWS
Beware of activist investors
In the first half of the year, 449 U.S. companies were subject to demands from activist investors, a 9% jump compared to the first half last year—and they want board seats. “Companies cannot ignore this space; there is the potential for an activist to target your company and make it onto the front page,” said Stephanie Hill, head of index at Mellon Investments. Fortune
Harris vs. Trump: Who is better for business?
As the presidential election approaches, find out where the Democrats and Republicans stand on the issues that businesses care about from taxes to immigration. But no matter who wins, one thing is clear: All signs point to higher tariffs on American imports. Fortune
Bosses missing from RTO
Despite the push to haul workers back to their desks, bosses have been notably absent from the office. In fact, 93% of CEOs say they don’t go into the office full-time and have instead adopted flexible working patterns. Perhaps unsurprisingly, workers who have been stung by RTO mandates will likely be left reeling by the double standards of IWG’s findings. Fortune
AROUND THE WATERCOOLER
Millennial entrepreneur behind a £35 million supplements startup Heights wishes he could tell his 20-year-old self to ‘sack off NFTs’ by Orianna Rosa Royle
One out of every 15 Americans is a millionaire, UBS says by Seamus Webster
Americans are cutting back on groceries to pay for AC by Sydney Lake
There’s a ‘very low probability’ Trump or Harris will reappoint Jerome Powell as Fed chair, political strategist says by Paolo Confino
Melinda French Gates says billionaires Ackman, Musk, Thiel don’t count as philanthropists: ‘Go look at their record’ by Marco Quiroz-Gutierrez
‘We don’t need to rely exclusively on Western countries to level up the less developed ones’ by Richard Attias (Commentary)
This edition of CEO Daily was curated by Orianna Rosa Royle.