These are the top 10 meme stocks Reddit’s Wall Street Bets is talking about right now

WallStreetBets

It’s paid to follow what stocks Reddit’s Wall Street Bets crowd are talking about this year, as several have gone through epic rallies.

From GameStop in January to AMC Entertainment last month, the 10.6 million-member forum has driven the conversation in so-called meme stocks that have exploded higher amid overwhelming demand from retail investors. Strong demand for stocks with shaky fundamentals has led to several hedge fund blowups that were caught on the opposite side of the trade betting against the company in question.

GameStop’s short-squeeze, in-part led by the Wall Street Bets crowd, led to a more than 50% drawdown in multi-billion dollar hedge fund Melvin Capital. Meanwhile, the sharp rally in struggling movie theater chain AMC Entertainment caused billions of dollar in losses for short-sellers in May and June.

As traders look to replicate the success of Wall Street Bets stocks, one data aggregator is compiling the most mentioned stocks on Reddit’s forum.

These are the top 10 meme stocks Reddit’s WallStreetBets forum is focused on right now, according to data compiled by SwaggyStocks. The list excludes mega-cap tech stocks and is based on mentions over the past 24 hours.

10. Cleveland Cliffs

Ticker: CLF
Wall Street Bet Mentions Over Past 24 Hours: 89
Market Capitalization: $10.3 billion

GettyImages 1228399692
Hot molten steel in a blast furnace.

9. Virgin Galactic

Ticker: SPCE
Wall Street Bet Mentions Over Past 24 Hours: 124
Market Capitalization: $10.7 billion

Virgin galactic whiteknighttwo
A Virgin Galactic spacecraft attached to its carrier vehicle, WhiteKnightTwo.

8. BlackBerry

Ticker: BB
Wall Street Bet Mentions Over Past 24 Hours: 145
Market Capitalization: $7.0 billion

A shareholder uses his Blackberry while waiting for the Research In Motion annual meeting to begin in Waterloo, July 17, 2007.
BlackBerry shareholder

7. Palantir

Ticker: PLTR
Wall Street Bet Mentions Over Past 24 Hours: 192
Market Capitalization: $46.9 billion

Palantir

6. Clean Energy Fuels

Ticker: CLNE
Wall Street Bet Mentions Over Past 24 Hours: 196
Market Capitalization: $2.0 billion

Clean Energy Fuels

5. SoFi

Ticker: SOFI
Wall Street Bet Mentions Over Past 24 Hours: 227
Market Capitalization: $13.9 billion

sofi fintech

4. GameStop

Ticker: GME
Wall Street Bet Mentions Over Past 24 Hours: 275
Market Capitalization: $14.4 billion

GameStop
Queue in front of Gamestop store in Christmas atmosphere in Milan during coronavirus emergency, Milan, Italy, on November 03 2020.

3. ContextLogic

Ticker: WISH
Wall Street Bet Mentions Over Past 24 Hours: 289
Market Capitalization: $7.7 billion

Wish CFO
Wish CFO Rajat Bahri.

2. AMC Entertainment

Ticker: AMC
Wall Street Bet Mentions Over Past 24 Hours: 297
Market Capitalization: $26.1 billion

AMC Entertainment

1. Clover Health

Ticker: CLOV
Wall Street Bet Mentions Over Past 24 Hours: 468
Market Capitalization: $4.3 billion

2016 05 04T000000Z_967239957_D1AETCDLYFAA_RTRMADP_3_FUNDS SOHN.JPG
Chamath Palihapitiya, Founder and CEO of Social Capital LP, speaks at the Sohn Investment Conference in New York on May 4, 2016.

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Michael Burry says the market is on the brink of collapse. A WallStreetBets user argues the famed investor’s predictions have been mostly wrong for the last 15 years.

Michael Burry big short
  • A post that analyzes how often Michael Burry’s bearish forecasts come true is trending on Reddit’s WallStreetBets.
  • The “Big Short” investor often warns about financial bubbles and crashes.
  • The Reddit user concluded that Burry is more often wrong than right with his predictions.
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A post that analyzes how often Michael Burry’s bearish forecasts come true is trending on Reddit’s Wall Street Bets forum.

The legendary investor rose to fame betting against the US housing market in the mid-2000’s, with his billion-dollar bet immortalized in the book and movie “The Big Short.”

Since then, Burry has issued several bearish forecasts, like a 2017 warning that the global financial system is going to collapse, and most recently a warning that the market is in the “greatest speculative bubble of all time.

User “u/nobjos” who told Insider their first name is “Noble” posted an analysis in several Reddit threads questioning how many times Burry has been correct. The user originally posted it on their Substack blog, though the post in WallStreetBets received over 5,000 upvotes.

“I recently observed that in every news article/tweet, he always talks about an impending crash. As recently as last week, he issued another warning stating that there would a ‘mother of all crashes soon due to the meme-stock and *****currency rally that will approach the size of countries,'” Noble said. “Basically, what I wanted to analyze was whether Michael Burry always predicts a crash and gets lucky when there is an actual crash or does his prediction actually turns out to be true most of the time?”

Noble tracked news articles that mentioned Burry forecasts from the last 15 years. He then compared the S&P 500’s return one month, one quarter, and to date after Burry’s bearish call. If Burry specified a stock, he used the particular stock as a benchmark.

The analysis shows that the S&P 500 has gone up 93% since Burry’s 2017 warning about a global financial meltdown and 50% since his 2019 prediction that index fund inflows are the next market bubble. Tesla stock has mostly gone down following Burry’s latest musings.

reddit thing

Noble concludes that “Burry’s only prediction that we can say confidently was right” after 2008 is that he called bitcoin a “speculative bubble” in March 2021. Bitcoin has dropped roughly 30% since his prediction, though Noble noted there isn’t enough data yet to show how Burry’s prediction will turn out over the next few years.

“I have immense respect for Michael Burry and his skills. He was a doctor and worked as a Stanford Hospital neurology resident and then left to start his own hedge fund that became extremely successful. But, as you can see from the above analysis, he is more often wrong than right with his predictions,” Noble wrote.

“But, the stock market rewards predictions disproportionately . Out of the 100 predictions you make, even if you get 99 wrong but get one extremely unlikely event right your overall returns will still be extremely high,” he added.

As for now, it remains to be seen whether Burry’s latest forecasts will come true. Some on Wall Street argue bubbles can take years to form and eventually pop, and it’s nearly impossible to pinpoint when the crash will occur.

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Meme-stock momentum has withered after retail traders drove a 3-week rally in AMC, BlackBerry, and other Reddit favorites

AMC stock
Igor Golovniov/SOPA Images/LightRocket via Getty Images

  • Meme stocks are losing steam after a three-week rally that mirrored the frenzy of activity seen earlier this year.
  • Some of the most popular stocks have dropped 17% in the past week, Vanda Research said.
  • “Retail investors will rush to the exit unless there’s an immediate rally,” the analysts said.
  • See more stories on Insider’s business page.

Meme-stock momentum is fading after a three-week rally that mirrored the GameStop frenzy earlier this year.

The latest meme-stock bubble has lasted for three weeks, said Vanda Research senior strategist Ben Onatibia and analyst Giacomo Pierantoniwhich, which is about the same timeframe as earlier this year when an army of Reddit day traders poured into GameStop to push a short squeeze and drove other favorites higher as well.

Now, momentum for the basket of companies is “deteriorating,” as a basket of the most popular stocks has fallen 17% in the past week, the analysts said. On top of that, open interest for meme-stock call options has dropped in the past couple days as traders cash in before the expiration. And that’s likely to continue.

“Given the amount of risk embedded in these investments, we think retail investors will rush to the exit unless there’s an immediate rally,” the analysts said in the Wednesday note.

Vanda Research Meme Stock pullback
Source: Bloomberg, VandaTrack

AMC Entertainment led the latest round of meme-stock madness. After the company’s once-largest shareholder dumped almost all of its remaining shares, retail traders poured into the stock for weeks, driving it to all-time highs. Shares of the movie-theater chain are now trading around $60.

Other retail-trader favorites, like BlackBerry, GameStop, Clover Health, and Nokia, followed AMC’s footsteps amid the rally. Meanwhile, new names like Beyond Meat, Wendy’s, WorkHorse, ContextLogic, and Clean Energy Fuels, also joined the basket.

The trend of meme stocks began earlier this year with retail traders wanting to squeeze short-sellers on nostalgic stocks like GameStop and AMC Entertainment. But now, Vanda said, “squeezing highly shorted stocks is quickly falling out of fashion.”

The fizzling out of the meme-stock craze has coincided with a rally in cryptocurrencies. Matt Maley, chief market strategist for Miller Tabak + Co., told Insider previously that meme stocks in the past have taken off when cryptocurrencies have corrected, and vice versa. He said as the Federal Reserve considers pulling back on quantitative easing, there will be less liquidity in the markets.

Meme stocks and other “high-flying liquidity-fueled assets are going to have a tougher time rallying to the same degree that they once did,” he said.

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New meme stock Corsair Gaming jumps 33% amid surging interest from Reddit traders

Reddit logo

A new meme stock is making the rounds on Wall Street Bets, surpassing mainstays such as GameStop and AMC Entertainment as the forums most-discussed company.

Shares of computer hardware company Corsair Gaming rose 33% on Monday to their highest since February this year, amid a surge in interest from Reddit traders.

In the past 24 hours, Corsair was the most mentioned stock on the 10-million member strong Wall Street Bets forum, garnering over 1,310 mentions, according to data from Quantitative Quiver. Clean Energy Fuels ranked as the second, followed by AMC.

One user on Monday claimed Corsair will “swallow the gaming industry and be a millionaire maker stock.”

The nearly 900-word post, which explained why the company is in a strong position to leverage demand in the gaming sector received nearly a thousand upvotes.

“Put this in your boomer dad’s portfolio (shares) and If you like gambling, buy some calls,” the post said.

Another post, which also received a thousand upvotes, detailed five stocks to watch out for this week, including Corsair. Others on the list are BlackBerry, Clean Energy, AMC, and GameStop.

Data from MarketBeat also show that 21.8% of Corsair’s shares are sold short, in contrast to Clean Energy’s 5.91%.

Meme stocks, an umbrella term describing a group of companies that have seen their stock surge since the GameStop craze in January, have been on the move again as of late. AMC shares surged at the end of May, while a new group of meme-stock names have been making the rounds on forums frequented by retail traders.

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GameStop plunges 27% as company says it plans to sell up to 5 million shares and discloses SEC request for information on trading activity

GameStop store New York City January 2021.JPG
  • GameStop dropped 27% on Thursday on the company’s plans to sell additional shares and as the SEC looks into trading activity of its stock.
  • The video-game retailer, whose shares are part of a meme-stocks rally, said it will cooperate with the SEC’s inquiry.
  • The company could sell up to 5 million shares.
  • See more stories on Insider’s business page.

GameStop sank by nearly 30% on Thursday after the video game retailer said it may sell millions of shares and said the Securities and Exchange Commission has requested information as part of its investigation into the trading of its shares.

The company issued the updates late Wednesday alongside first-quarter financial results that beat Wall Street’s expectations.

Shares of GameStop on Thursday plunged 27% to finish at $229.39. The stock started falling in after-hours trade Wednesday as GameStop said it may sell up to an additional 5 million shares as part of a previous agreement with its sales agent, Jefferies. Investors are concerned about dilution, or that the value of shares already outstanding will decline. The sale of the shares would take place from time to time at or near market prices under the “at-the-money” agreement.

Another source of downward pressure was GameStop’s disclosure that SEC staff in late May requested the company voluntarily provide documents and other information as part of the regulator’s investigation into the trading activity of its securities and in the securities of other companies.

GameStop’s stock price has soared by more than 1,500% so far this year as part of a surge in so-called meme stocks — including AMC Entertainment, Bed Bath & Beyond, BlackBerry — that’s been driven by retail investors working together to force a short squeeze on hedge funds aiming to profit from bets that the companies’ share prices will fall.

“We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC Staff regarding this matter. This inquiry is not expected to adversely impact us,” GameStop said as part of its quarterly financial report.

GameStop late Wednesday said sales rose to $1.28 billion, higher than the $1.16 billion expected by four analysts in a FactSet poll. Its adjusted loss was $0.45 a share, narrower than its adjusted loss of $2.44 a share a year earlier and narrower than Wall Street’s forecast of a loss of $0.83 a share.

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Legendary investor Stanley Druckenmiller said dogecoin is a ‘manifestation of the craziest monetary policy in history’ in a recent interview. Here are 8 of his best quotes.

GettyImages 452232722
Stanley Druckenmiller, Founder, Duquesne Capital Management in New York, 2014.

  • Stanley Druckenmiller told The Hustle in a recent interview that dogecoin is the “craziest monetary policy in history.”
  • The billionaire investor also shared his thoughts on bitcoin, ether, and the biggest risk to the stock market right now.
  • He also predicted which FAAMG company will first hit a market capitalization of $5 trillion.
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Among the many things billionaire investor Stanley Druckenmiller believes in, dogecoin isn’t one of them.

In a recent interview with The Hustle, the investor said he does not keep tabs with the developments surrounding the meme cryptocurrency, which started as a joke in 2013.

“I just try and pretend doge doesn’t exist,” he told The Hustle. “I think so little of it, it doesn’t even bother me when it goes up.”

Dogecoin has risen at a blistering pace so far this year, soaring more than 7,200%. The massive gains were due in large part to prominent figures like Elon Musk and Mark Cuban continuously backing the token.

Druckenmiller, the head of Duquesne Capital Management, also shared some of his thoughts on bitcoin, ether, and the recent tech sell-off.

Here are his 8 best quotes from the interview, lightly edited and condensed for clarity:

On dogecoin:

“[Dogecoin] is just like NFTs. It’s a manifestation of the craziest monetary policy in history. And I think since there’s no limit on supply, I don’t really see the utility of [dogecoin] right now. It’s just this wave of money in the Greater Fool Theory.”

On bitcoin:

“I took my costs and then some out of it and I still own some of it. My heart’s never been in it. I’m a 68-year old dinosaur, but once it started moving and these institutions started upping it, I could see the old elephant trying to get through the keyhole and they can’t fit through in time.”

On ether:

I’m a little more skeptical of whether it can hold its position. It reminds me a little of MySpace before Facebook. Or maybe a better analogy is Yahoo before Google came along. Google wasn’t that much faster than Yahoo, but it didn’t need to be. All it needed to be was a little bit faster and the rest is history.”

On the recent tech sell-off:

“Think of the tech stocks like a company selling railway ties and building the guts of the internet. When you’re building the railroad, your sales are going up +50, +60, or +70% a year. But once the railroad is built [you don’t need the railway ties anymore]. Your growth not only doesn’t go up 70%, it goes down because on a rate of change basis, you don’t need any more railroad ties.”

On the FAAMG company that would hit $5 trillion:

“If you put a gun to my head or we’re going to Vegas: Number 1 would be Amazon, number 2 would be Microsoft … I’ve never really believed Apple had the innovation to take you to the next level and it is mainly a hardware company … Google could have a big pop, ironically, if the government breaks them up because their core search business is literally the best business I’ve ever seen.”

On the market’s biggest risk:

Without a doubt: inflation strong enough that the Fed responds to it. No doubt about it. This bubble has gone long enough and it’s extended enough that the minute they start tightening, the equity market should go down a lot.”

On the effect of the recent Wall Street Bets craze:

“They’ll probably migrate away from some of the more radioactive names like GameStop. But I think it’ll actually end up being some core healthy information moving through the sharing network.”

On concentrating one’s bets:

When I’ve looked at all the investors (that) have very large reputations – Warren Buffett, Carl Icahn, George Soros – they all only have one thing in common. And it’s the exact opposite of what they teach in a business school. It is to make large concentrated bets where they have a lot of conviction.”

Read more: Glauber Contessoto became a ‘dogecoin millionaire’ this year. He explains why the recent drop does not shake his bullishness in the joke token – and shared his advice for new buyers.

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GameStop rally extends to 35% as Reddit traders push new meme-stock feeding frenzy

WallStreetBets logo
Wall Street Bets users have driven up the price of GameStop stock

  • GameStop has surged 35% over the past two-days amid a renewed hype from Reddit traders.
  • The video-game retailer has seen a resurgence in both price and Reddit activity following a 2-month consolidation in the stock.
  • Short-sellers are likely aiding the rally as GameStop short interest remains elevated at about 21%.
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GameStop has surged as much as 35% over the past two days amid a renewed resurgence of chatter about the video game retailer on Reddit’s Wall Street Bets forum.

The stock has consolidated sideways over the past two-months, but shares have moved to the upside in recent days alongside its “meme stock” sidekick AMC Entertainment, which is up 49% since the start of the week.

The move higher in GameStop is causing short-sellers more pain, as short interest in the company has remained elevated even after hedge fund Melvin Capital capitulated out of its bet against the company. According to data from MarketBeat, 21% of GameStop’s share float is sold short, and month-to-date, GameStop short-sellers have lost $442 million, according to data from ORTEX.

GameStop has capitalized on its epic year-to-date share-price rally of more than 1,100%. The company raised more than $550 million via an at-the-market share offering, retired debt, and has implemented a turnaround strategy led by Chewy.com co-founder Ryan Cohen.

That turnaroun plan was on full display on Tuesday after the company revealed that it is building an NFT platform on the Ethereum blockchain.

“gamestop? GAME ON!!!!” said a Wall Street Bets post in reaction to the recent rise in shares of GameStop. The post had about 18,000 upvotes as of Wednesday morning.

Shares of GameStop are still about 50% below its record intra-day high of $483 reached during the wild January short-squeeze.

gamestop charrttt.JPG
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Wall Street Bets was right: Hertz’s bankruptcy auction will actually give shareholders a handsome payout – even after Wall Street decided the stock was worthless

FILE PHOTO: The desk of car rental company Hertz is seen at Nice International airport during the coronavirus disease (COVID-19) outbreak in Nice, France, May 27, 2020. REUTERS/Eric Gaillard

Long before GameStop and Reddit’s Wall Street Bets became synonymous, the social-media platform was enamored of another stock: Hertz.

The car-rental company became the target of Reddit-fueled traders last summer when it announced it would file for bankruptcy. Shares of Hertz spiked as much as 825% in a matter of weeks. Wall Street onlookers were scratching their heads, wondering why retail investors were scooping up shares of a company that couldn’t meet its debt obligations.

In June, retail investors who steadfastly believed that “stonks only go up” were especially excited that the billionaire investor Carl Icahn missed out on Hertz’s massive rally. Icahn had sold his Hertz position at an average price of $0.72, representing a loss of more than $1.8 billion.

“Good job guys. Hertz is now a viable company again. Carl Icahn is a clown who bought high, sold low,” a Wall Street Bets user commented last summer.

Even Hertz itself didn’t have as much faith in its stock as the retail traders did. When the company issued more shares in June, it said its stock could be “worthless.”

“We are in the process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless. Investing in our common stock involves a high degree of risk,” the company said in a filing with the Securities and Exchange Commission.

Typically, in a corporate bankruptcy case like Hertz’s, equity shareholders would receive nothing. In March, Hertz unveiled its reorganization plan, which said shareholders would receive no payout.

But on Wednesday, Hertz announced that it had accepted a $6 billion bid from a group of investors – Knighthead Capital Management, Certares Opportunities, and Apollo Capital Management – to exit bankruptcy. Knighthead’s plan values Hertz at about $7.4 billion including debt, according to Bloomberg. The winning bid would pay shareholders close to $8 a share.

Read more: A 29-year-old crypto billionaire who’s perfected digital-currency arbitrage shares 2 tips for investors looking to get started in trading – and explains why ether is unlikely to surpass bitcoin

As part of the Hertz proposal, institutional and accredited equity investors would be given about $240 million in cash and the chance to participate in either a $1.6 billion rights offering or warrants for about 20% of the reorganized company, Bloomberg reported.

Many of the traders who speculated on Reddit likely won’t qualify as institutional or accredited investors and therefore won’t get new shares. But their instinct about the value of Hertz’s stock turned out to be correct, even when much of Wall Street didn’t believe so.

The $8 share price is higher than what any retail investor who purchased last summer paid.

Andrew Glenn, a managing partner of Glenn Agre Bergman & Fuentes who orchestrated the winning bid, told Insider the equity payout to shareholders was “unprecedented.”

“Just six weeks ago, shareholders were going to get nothing, and now they’re getting upwards of $8 a share,” Glenn said. “That doesn’t happen every day in bankruptcy. In fact, I’ve never seen it happen.”

He added that a confluence of events had led to the success for the equity shareholders and Hertz’s valuation: the V-shaped recovery, pent-up demand for travel, and a shortage of rental cars as many companies sent their cars to the used-car market during the pandemic.

“It’s just a perfect storm that happened first gradually and then very quickly over the first quarter of this year and really the last two months,” he said. “Our clients saw that trend happening before it unfolded, they had conviction as to the valuation, and they entered into the bankruptcy and became the mouthpiece in court for the Knighthead proposal.”

Shares of Hertz extended their gains for the second day in a row on Thursday, jumping as much as 11%, to $6.36. That followed a nearly 70% surge on Wednesday.

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The founder of Wall Street Bets is creating a blockchain app to ‘fight corruption’ in financial markets

WallStreetBets founder Jaime Rogozinski
WallStreetBets founder Jaime Rogozinski.

  • The founder of Wall Streets Bets is launching a blockchain app and exchange-traded portfolios in an effort to empower retail investors to “fight back against corrupt institutions.”
  • “The amalgamation of blockchain technology with financial markets is the next logical step for finance,” said Wall Street Bets founder Jaime Rogozinski.
  • Retail investors would use a token to vote on issues related to the Wall Street Bets exchange-traded portfolios.
  • . See more stories on Insider’s business page.

The founder of Reddit’s Wall Street Bets forum, Jaime Rogozinski, is planning to launch a blockchain app and exchange-traded portfolios in an effort toward “rooting out corruption” in the world of finance.

Rogozinski has been working on a decentralized application and collaborating with blockchain and financial technology experts to create exchange-traded portfolios, or ETPs, that will give retail investors exposure to a variety of assets, as well as a say in how the portfolios are run, according to a statement released on Wednesday.

“The amalgamation of blockchain technology with financial markets is the next logical step for finance — and not just for Wall Street but everywhere,” said Rogozinski in a statement that calls him a strategic partner in the Wall Street Bets Decentralized Application, or DApp, project. “It will result in stronger, more democratized markets and will empower individuals around the world.”

Blockchain-based finance would give retail investors the opportunity “to fight back against corrupt institutions and to end dependence on them altogether,” the statement said.

The profile of the Wall Street Bets forum on Reddit was elevated this year after investors on the message board sparked a rally in shares of video game retailer GameStop that resulted in losses for short sellers.

The ETPs would be run under a decentralized autonomous organization, or DAO, that would allow community members to vote on issues related to the portfolios using a $WSB governance token. In a given example, token holders who believe electric vehicle maker Tesla should comprise 90% of a particular ETP instead of 10% can vote on it by signing a transaction using their $WSB tokens during voting cycles.

Wall Street Bets, formed in 2012 in the wake of the global financial crisis, calls itself a movement centered on empowering “little guy” investors against “unaccountable” financial institutions. Wall Street Bets ETPs are being pitched as an “alternative to the kind of market manipulation perpetuated by opaque and politically connected” banks and hedge funds.

“For WallStreetbets, the forthcoming release of our $WSB token is a shift in strategy,” said BTCVIX, CEO of the Wall Street Bets DApp.

“We tried to fight back through protest after the global financial crash back in 2008-2009. We then tried to beat Wall Street insiders at their own game by short squeezing them to near bankruptcy. And now, with our soon-to-be-launched ETPs, we aim to simply exit the existing system for one that is fair and relies on community,” said BTCVIX whose Twitter bio says “Banned from r/WSB for talking crypto in 2015.”

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Robinhood’s biggest business tripled in the 1st quarter as Reddit-fueled day-trading ran wild

Vladimir Tenev Robinhood cofounder
Co-founder of Robinhood, Vladimir Tenev.

  • Robinhood’s revenue soared in the first quarter as a result of the early 2021 social-media fueled day-trading mania.
  • The trading app’s payment for order flow business generated $331 million in revenue during the period, per the WSJ.
  • That was more than triple the amount the amount generated in the first quarter of 2020.
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The Reddit-fueled trading frenzy of early 2021 propelled Robinhood‘s biggest business to new heights, according to The Wall Street Journal.

The brokerage app’s payment for order flow generated $331 million in revenue in the first quarter, said the Journal, citing a securities filing from last week. That’s more than triple the $91 million Robinhood reeled in from the business during the first quarter of 2020.

Payment for order flow is the compensation brokerages earn by having third-party firms execute client orders. When Robinhood’s clients buy and sell stocks and options, Robinhood routes the trade orders to outside firms who actuate carry out the trade. The outside firms pay Robinhood for routing the order to them.

The practice is Robinhood’s largest source of revenue, and has drawn criticism from investor advocates who say it encourages brokerages to maximize their revenue at the expense of customers.

In December, Robinhood agreed to pay $65 million to settle charges from the SEC that accused the app of making misleading statements about how it made money with market makers.

The SEC alleged that the brokerage routinely provided inferior trade prices, even as Robinhood marketed its trades as commission-free and executed with quality that matched or beat peers. The second-rate prices have cost clients a total of $34.1 million, even after accounting for the lack of commission fees, the SEC said.

Read more: Buy these 14 high-quality stocks poised to beat the market as the economy enters a new phase of rapid growth, Credit Suisse says

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