Robinhood co-founders are no longer billionaires after stocks drop 80%

As many of their clients have learned over the past year, one minute the stock market is giving you a fortune…and the next it’s taking it away.

Baiju Bhatt and Vladimir “Vlad” Tenev are the co-founders of Robinhood Markets, Inc., the stock/crypto trading platform. The duo founded Robinhood in 2015. The app found a huge user base after introducing commission-free stock trading, upending the likes of E*Trade which historically charged between $7 and $10 per stock trade .

In 2018, Robinhood had 3 million users. This additional growth was largely fueled by an ingenious referral program where current users received free shares in exchange for new users joining.

That same year, Baiju and Vlad became paper billionaires for the first time when the company raised funds at a valuation of $5.6 billion. Additional rounds of private funding would see the company’s valuation rise to $7.6 billion, then $8.6 billion, then $11.2 billion. In September 2020, the company completed its final round of private funding, raising $460 million at a valuation of $11.7 billion.

In July 2021, Robinhood went public. It ended its first day as a public company with a market capitalization of $30 billion. A month later, the company’s market capitalization reached $46 billion.

Vlad Tenev and Baiju each own 8% of Robinhood’s outstanding shares. When the company was worth $46 billion, on paper they were each worth officially…

$3.7 billion

(Photo by Cindy Ord/Getty Images for Robinhood)

Unfortunately, $46 billion would turn out to be (for now) the company’s highest valuation. When the company was worth $46 billion, Robinhood’s price per share was $55.

When markets closed on Tuesday afternoon, Robinhood’s stock price was $9.27.

That’s an 83% drop from its all-time high in August of last year. The stock has fallen 73% in the past six months alone. Robinhood’s current market capitalization is approximately $8 billion. That’s less than many of its recent private finance ratings.

With a market cap of $8 billion, Vlad and Baiju’s 8% stakes are currently worth around…

$640 million

It’s still an impressive amount of money, but it’s never fun to lose billionaire status.

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