Robinhood co-founder and CEO Vlad Tenev joins CNBC's "Squawk on the Street" to discuss the company's upcoming IPO at the Nasdaq. Tenev also discusses the role of 'payment for order flow' in the company's business model, and growing investor interest in cryptocurrencies. To see the full interview with Tenev sign up for a free trial to CNBC Pro: https://cnb.cx/3iWS3Ku

Robinhood CEO and co-founder Vlad Tenev on Thursday defended retail clients who invest in so-called meme stocks, saying the phenomenon gives embattled companies access to capital they otherwise wouldn’t have.

“I think it’s a real thing. There’s customers that love these companies, they want them to thrive,” Tenev told CNBC’s Andrew Ross Sorkin on Thursday ahead of the stock trading app’s Nasdaq debut. “You’re seeing [meme stocks] also get resources that allow them to hire really good management teams, in some cases, and then build for the future.”

Robinhood helped draw unprecedented levels of new, younger traders to the stock market during the pandemic. That surge has continued into 2021, marked by frenzied trading around meme stocks.

The millennial-favored stock trading app found itself in the middle of a firestorm in January amid the short squeeze in GameStop, which was partially fueled by Reddit-driven retail investors.

“I think what’s interesting with what we’ve seen in retail investing over the past year is that a lot of these companies have been hit hard by the pandemic,” Tenev said.” “It started with some of the airlines and then followed with some of the retailers, some movie chains and brick and mortar. You have the institutions that are basically writing these companies off and then retail investors coming in and keeping them up and supporting them.”

At the height of the meme stock surge, Robinhood restricted trading of certain securities due to increased capital requirements from clearing houses. Robinhood raised more than $3.4 billion in a few days to shore up its balance sheet.

“I don’t know if people have understood the ramifications of what high retail participation in the markets means but I think fundamentally it’s a very good thing,” added Tenev.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n...

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-cred...

#CNBC
#CNBCTV