Robinhood wants retail investors to have a Say
The Future. Robinhood acquired a startup called Say Technologies that could be used to make proxy voting more accessible for new retail investors. By bringing the practice into the digital age, public companies could experience their most democratic form of governance yet… which could reshape businesses in some exciting (or terrifying) ways.
Buying is the first part
Retail investors are buying stocks in record numbers, but aren’t using the power that stocks give them. Stepping up, Robinhood is trying to change things.
- Robinhood recently acquired investor-relations startup Say Technologies for $140 million.
- Say has built a communications platform that investors can use to chat with companies they invest in and pose questions.
- The acquisition could allow companies to pose questions to Robinhood investors to participate in a next-generation form of “proxy voting.”
Proxy voting is a vote among shareholders (typically done during shareholder meetings) to approve or deny a variety of initiatives — compensation for top executives or whether a deal should go through. It’s one of the tenets of a “public” company.
While stock investment enthusiasm is high — especially meme-powered stonks such as GameStop and AMC — many newly-minted stock owners aren’t participating in the important work of being a voice in the company. This isn’t bad faith behaviour. It may be that the idea of proxy voting just doesn’t align with modern trends of communication.
Irwin Simon, CEO of cannabis company Tilray, notes that “it’s hard to get those shareholders to show up and vote. You know, nobody has home phones anymore. No one answers their cellphone to an unknown number. When you mail a proxy to someone’s house or apartment, it goes in the garbage.”
When it comes to a community that uses an app to trade stocks and leverages Reddit to learn about the market, a call to a home phone or sending notices my snail mail are just not going to cut it.