Controversial fintech firm Robinhood expected to announce Charlotte expansion Tuesday
Local and North Carolina officials are expected to announce on Tuesday that controversial stock trading app Robinhood will bring hundreds of jobs to a new office in Charlotte, following months of negotiations and a national scandal.
Tariq Bokhari, a Republican Charlotte City Council member and founder and executive director of the Carolina Fintech Hub, confirmed on Monday that Robinhood plans to open a facility in Charlotte.
The deal is the latest in a string of expansions from financial technology firms in the Charlotte area, although such announcements have slowed during COVID-19. Still, the arrival of a Silicon Valley company in Charlotte is a major shift for a city that lost out on its pitch for Amazon’s second headquarters more than two years ago.
Menlo Park, California-based Robinhood was founded in 2013, and has grown rapidly, with 13 million users last year.
The Silicon Valley startup pioneered free stock trading, with other companies following suit. It is in the process of going public, but a controversy over restrictions enacted after a frenzy of GameStop trading has plagued the firm.
The Charlotte location of Robinhood’s office has not been publicly disclosed. But Mecklenburg County records show there’s a permit on file titled “Robinhood - Office Upfit” for an office tower underway from developer Lincoln Harris at 650 South Tryon Street.
A spokeswoman for Lincoln Harris did not respond to a request for comment Monday. A Robinhood spokesperson did not respond to a request for comment.
Robinhood’s website lists job openings for a number of roles in Charlotte and Fort Mill, S.C., including “customer experience” compliance advisor and market operations specialist.
Neither the total number of jobs Robinhood will bring to Charlotte, nor how much the company intends to spend on the move, is known yet.
David Rhoades, a spokesman for the North Carolina Department of Commerce, declined to comment on discussions with any company.
But the state’s Economic Investment Committee is expected to meet Tuesday at 11 a.m. to consider “one or more” economic development projects.
How it happened
But speaking publicly for the first time about Robinhood’s move, Bokhari shared details with the Observer of how the deal came together.
Bokhari said he first learned of Robinhood’s expansion plans last summer.
The company was in the final stages of choosing a location elsewhere, Bokhari said, but he said he helped convince representatives to listen to Charlotte’s pitch. While Bokhari said the firm was impressed, in the end it chose a location in the Dallas-Fort Worth area.
But last October, Bokhari said he spoke with the representative he was working with at Robinhood about the company’s plans to open another office. The city and Bokhari’s group again made their case to the company, and Charlotte made it onto the company’s shortlist, he said.
“At the end I was feeling very confident we were going to get it,” Bokhari said.
Then, the GameStop trading frenzy hit.
Recent scandals
In January, amateur traders sharing tips on social media websites, especially Reddit, fueled a surge in the price of beleaguered video game retailer GameStop.
Large hedge funds had previously bet that the price of GameStop would decline through a concept known as short selling. So when the mania ensued, those funds had to buy back shares because they were suffering huge losses.
But in a move that drew sharp criticism from both sides of the political aisle, Robinhood and other brokers soon restricted the buying of shares of GameStop. It has since defended that decision and denied charges that it was helping hedge funds that were losing money.
Trade clearinghouses, intermediaries between buyers and sellers, have deposit requirements for brokers like Robinhood. The company has said that it had to limit trading because those deposit requirements from its clearinghouse increased higher than the firm anticipated.
Investors poured billions into Robinhood as it eventually eased restrictions.
Meanwhile in Charlotte, negotiations were continuing. Bokhari said he felt confident that the company would weather the controversy because of its leadership team and ability to raise money.
Robinhood has hardly emerged unscathed. CEO Vlad Tenev apologized during a Congressional hearing last month as members of Congress excoriated him, and the firm is facing dozens of lawsuits.
Tech growth
In recent years, Charlotte has recruited a number of major tech companies, especially those in the financial industry, given the city’s status as a banking hub.
Online mortgage lender Better.com and Microsoft both announced new and additional jobs in the area, respectively, in 2019. And Lowe’s is building a 2,000 employee global tech hub in South End.
Bokhari said he views the Carolina Fintech Hub as a “mini chamber of commerce” for recruiting technology and fintech firms. He said economic development wins like Better.com, Atrium’s medical school and Robinhood all build on each other to help land the next company.
This story was originally published March 29, 2021 at 6:30 PM with the headline "Controversial fintech firm Robinhood expected to announce Charlotte expansion Tuesday."
