Vlad Tenev, the CEO of trading platform Robinhood Markets (HOOD), said that retail investors are missing out on some of the biggest opportunities in private markets, according to Bloomberg. In an interview for Bloomberg Wealth, Tenev called it “a big tragedy” that most of the growth and value gains now happen in private companies rather than public ones. As a result, he said that Robinhood is working on ways to make it easier for everyday investors to access these opportunities in the U.S., where exposure is currently very limited.
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It is worth noting that Robinhood has already tested a new approach in Europe. Indeed, last month, the company introduced tokens that give retail clients exposure to private companies, although these tokens do not technically represent equity. The idea is to give investors a way to participate in private markets without owning actual shares. However, the move raised questions about how brokers value these tokens and whether they are safe for retail traders.
Nevertheless, the interest in private companies is growing among both retail and institutional investors, thanks to rising valuations. In addition, Tenev believes that improving retail access to private markets could address what he calls one of the “greatest remaining iniquities and opportunities” in U.S. capital markets. For investors, this move could change the way that platforms like Robinhood compete for users and open the door to new opportunities, as well as new risks.
Is Robinhood Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HOOD stock based on 14 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average HOOD price target of $88.37 per share implies 16.8% downside risk.
