More than 200,000 Robinhood clients have already expressed their intent to use its new fractional stock trading app announced yesterday.
Vladimir Tenev, co-founder at Robinhood, said that the clients were “already in line” for the app, considering the early signs as “really promising,” CNBC reports Dec. 13. After Robinhood’s user base recently crossed 10 million accounts, the firm is now valued at $7.6 billion and plans to expand its business to the United Kingdom, according to recent data.
Robinhood users can buy slices of Amazon shares and ETFs for just $1
According to a report by Business Insider, Robinhood will start rolling out the service to certain customers on Dec. 16. The feature will also allow users to invest in portions of exchange-traded funds (ETFs), the report notes.
By launching the service, Robinhood apparently wants to attract first-time investors as the app will allow to buy slices of a share in popular companies such as Amazon — which trades at $1,765 per share at press time — for just as low as $1.
“In particular, with this feature, we see customers’ eyes light up when they deposit $10 or $100 and the entire universe of stocks that they would like to invest in, or stocks that represent companies that make products they love, is available to them.”
Other big firms offering similar services
Robinhood is not the first firm to allow investors to buy small pieces of major stocks though. In late October, Twitter CEO Jack Dorsey’s financial services firm Square announced it will offer users the ability to trade fractions of a stock for as little as $1 on its Cash App. Prior to that, United States-based investment giant Charles Schwab announced a similar initiative on Oct. 17.
As reported on Nov. 22, American financial services giant JPMorgan announced a similar initiative, allowing accounts with less than $5,000 in ETFs and cash balances to trade both whole and fractional shares.
According to Business Insider, Robinhood’s product manager Abhishek Fatehpuria declined to reveal when the company started working on fractional shares, noting that they have been thinking about the initiative “for a while.”
The news comes after Robinhood voluntarily decided to withdraw its bank charter application with the Office of the Comptroller of the Currency in late November before applying for it in April this year.