Legendary outlaw Robin Hood stole from the rich; his modern-day namesake, Robinhood Markets, wants them to give willingly. Having recovered from a long slump, the $18 billion online brokerage led by Vlad Tenev wants to be considered a peer to the world’s financial titans. This strategy involves fresh risk. Robinhood’s market valuation collapsed after an exuberant 2021 initial public offering that rode the coattails of at-home traders during the pandemic. Rising interest rates, and the return of buying and selling stocks and cryptocurrencies, have powered a roughly 60% pickup in the stock price this year. Robinhood’s interest revenue, for example, has

Stripe develops software to facilitate payments, but its financial backers are struggling to receive theirs. Started by John and Patrick Collison in 2009, the financial technology company has given no sign of going public soon, making it hard for venture capitalists to cash out. Enter Sequoia Capital with a plan that will buy some time, but one which if applied too often would distort the investment model. Most successful 15-year-old startups already have been bought by a bigger rival or proceeded with an initial public offering. Stripe hasn’t. To appease limited partners itchy to exit funds from 2009 to 2012,

After 25 years of muscling in on mega-finance, PayPal should benefit from outside help. A six-month CEO search led to Alex Chriss at Intuit to replace retiring Dan Schulman. The $70 billion company’s struggles, and the incoming chief’s credentials, set the stage for a transaction of some sort. PayPal has become the most trusted place, beyond banks, for consumers to store their money, according to research firm Euromonitor. Earlier this month, however, its quarterly results disappointed investors again, sending its stock down another 12% and bringing the decline to 80% since a July 2021 peak. Chriss ought to be able to help in one trouble spot,

The price of PayPal’s CEO hunt just grew by some $9 billion. Six months after boss Dan Schulman said he was retiring, the company unveiled disappointing second-quarter results that sent the shares down by another 11% on Thursday, lopping the 10-figure sum off its market value. Vital strategic plans are in a costly holding pattern. An e-commerce boom during the pandemic lifted PayPal’s stock price to a record high of about $308 in mid-2021. A five-plus year stretch of double-digit percentage revenue growth ended last year, when the rate slowed to a little more than 8%, and the shares have plummeted

Private equity has a new customer: Joe Public. Buyout firm KKR announced a partnership on Tuesday with financial technology firm PayPal, under which it will fund the short-term loans that PayPal offers to consumers at the point of payment, as an alternative to credit cards. It’s a cozy arrangement for all involved, and marks another step in private lenders’ encroachment into traditional financiers’ turf. So-called “buy now pay later” loans are a fast-growing novelty: PayPal’s $6 billion in payment volume in the first quarter was 70% higher than a year earlier. Until now, the company had funded this effort itself, sending retailers

When it comes to the possibility of a recession, some U.S. bank executives are saying the quiet part out loud. Not only would the largest lenders survive even a savage economic downturn, but they may emerge stronger from it. Bank chiefs talk openly about a coming crunch, but don’t seem to fear it. Citigroup’s Jane Fraser said in July that banks depend on capital, liquidity, credit quality and reserves in a recession, and that she feels “very good about all four.” JPMorgan boss Jamie Dimon, has warned of an economic “hurricane”, and told clients two weeks ago that there might

Tiger Global Management is a rare species in the hedge fund world. Often rivals such as John Paulson would close down their business to outside investors after their funds posted huge losses. But Tiger’s Chase Coleman managed to avoid the same fate. Investors might wonder how he got here. Tiger invested heavily in technology companies such as second-hand car dealer Carvana and cryptocurrency exchange Coinbase Global, whose valuations have suffered dramatically since the beginning of the year. Tiger’s two funds that mainly invested in public-listed stocks posted combined losses of nearly $20 billion as of end of May, LCH Investments

EToro, an Israeli rival to stock- and cryptocurrency-trading platform Robinhood Markets, just had to cut its worth by more than 15% in a merger deal with a blank-check company. Given high valuations in the world of special-purpose acquisition companies, it’s to be expected some agreements will be recut. What’s surprising is that it isn’t happening more often. Fintech Acquisition Corp V, a SPAC backed by financial-services investor Betsy Cohen, agreed to merge with eToro back in March 2021, implying an equity valuation of $10.4 billion. In a rejigged deal, triggered by the failure to meet certain conditions by the end of last year,

So-called fintechs come in many forms. Nubank, freshly listed on the New York Stock Exchange, has just become Latin America’s biggest bank by market capitalization. It raised $2.6 billion in an initial public offering at $9 a share on Wednesday evening, giving it a market value above $40 billion. That’s priced for unlikely perfection. The newbie’s valuation now narrowly tops that of regional powerhouse Itaú Unibanco, though that could change once trading starts later on Thursday. For an eight-year-old upstart originally set up to offer cheap credit cards in Brazil, that’s eye-catching. So is Nubank’s price-to-tangible book value ratio, which is in the ballpark

Silicon Valley investor Altimeter Capital has sketched a handy roadmap for speeding hot Asian technology companies to overseas public markets. Southeast Asian ride-hailing-to-delivery-to-payments group Grab is listing in New York via a combination with a blank-cheque firm. It’s the largest so-called SPAC merger, with a structure that cushions the SoftBank-backed company’s amped-up $39.6 billion equity valuation. Bankers have been scratching their heads over ways to introduce U.S. investors to fast-growing companies from a relatively unknown region. One approach is to assign conservative growth forecasts and valuations. That’s what RMG Acquisition Corp II, led by Riverside Management’s Jim Carpenter, did in

Robin Hood had a whole quiver of sharp arrows. Robinhood Markets has two: its tremendous growth, and the stream of payments the U.S. online brokerage gets from financial companies that handle its customers’ trades. Both may be losing their edge, just as the company heads towards an initial public offering. Robinhood has won over 13 million retail customers, almost 50% more than it had in mid-2019, by ripping up the old broker model of charging commissions. Instead, most of its revenue comes from so-called payment for order flow. That’s when big firms like Citadel Securities and Virtu Financial pay brokers

The 2008 crisis helped birth a new breed of financial company. Digital banks like Chime and Revolut, and online lenders from Kabbage to Klarna, spent the past decade stealing established institutions’ customers with technologically slick, low-cost products. The current crisis will prompt a brutal comedown for some of this richly valued crop. Fintech is an increasingly diverse sector, but two broad types of business have gained particular traction among investors and consumers. First are the so-called neobanks. America’s Chime, Germany’s N26, Brazil’s Nubank and London-based Revolut, Monzo Bank and Starling Bank have collectively raised $4.6 billion and turned it into