payment for order flow will not change it


Widely followed investor Cathie Wood remains the holder of Robinhood (HOOD) even as the threat of a crackdown on order flow payments by regulators looms as a key risk.

The founder, CEO and CIO of Ark Invest said in an exclusive interview on Yahoo Finance Live that Robinhood currently owns 1% of her company.

Wood plunged the Robinhood stock market into a spin in early August after revealing purchases of shares from the trading platform after a disappointing IPO in late July. Shares quickly shot up to an intraday high of $ 85 on August 4, according to data from Yahoo Finance Plus, as traders who pass Wood’s every call of the company adopted the buy.

“We are looking at the controversy over payment for orders. We know the president [Gary] Gensler at the SEC is looking into this. That’s a big percentage of Robinhood’s income. But we actually think not much is going to change there because the system has been so good from an execution standpoint for the end investor. So we would be surprised to see a lot of changes on this front. But again, we’re in a situation where we have to listen to what the SEC is saying, “Wood told Yahoo Finance Live.

Wood has reportedly munched on more Robinhood shares this week as they continue to be under pressure over regulatory concerns.

Gensler said in an interview with Barron’s earlier in the week that the payment review for the order was on the table. If order flow payment is banned – or fundamentally overhauled – Robinhood could see its business model disrupted.

Wood said her appeal reflects Robinhood’s innovative business and how it has shaped the investment landscape.

“I actually think Robinhood has done a great service to the investment community,” added Wood.

Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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