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Robinhood, Wish, SentinelOne: 3 Things to Watch Into Happy Hour

WISH has a bit of a momentum following, Robinhood has to pay up according to FINRA and SentinelOne is officially a public company. Here are some of the stories that TheStreet's Katherine Ross is watching.

It's freaking hump day!

By now, if you follow me on social media, you might have seen that there was some news from me about TheStreet Live. For those who haven't seen my announcement, you can watch the video below.

To sum it up, I am stepping aside from TheStreet Live. It truly has been an amazing three years of working on that show and with the team, which is also partially why I'm not leaving TheStreet. I love the brand here and I love what we have. 

So, my coverage going forward is going to focus on this, what I like to call 3 Things to Know Before Happy Hour, Coffee With Katherine and TikTok (yep, I'm finally doing it!), and of course video interviews to not only cover the stories and topics that are important to investors, but also to focus in on financial literacy and younger investors. 

You can find my TikTok's on da.street and bykatherineross (as you can find me on all social platforms) and stick with TheStreet for the rest of my reporting. 

And if you're on your phone, I've linked the first one here and the second one here. 

Alright, time for me to get back to work here: I've got a stock and two stories I'm watching and I think these might interest you, too.

Kicking it Off With WISH

ContextLogic, the company that operates Wish, trades under the ticker symbol  (WISH) - Get Report

This has been a stock that has quietly risen in popularity, at least with the people I follow on Twitter and other forums such as Discord. And, yes, there have been a handful of Reddit posts. 

However, as I think I said yesterday, WallStreetBets is not trusted by a lot of the Redditors that I talk to, and to be fair the subreddit has seen quite the boon since the GameStop  (GME) - Get Report and AMC  (AMC) - Get Report short squeeze's really hit the mainstream media. 

For me, I was curious about WISH after it kept coming up in my daily tweets where I take y'all's temperature about stocks

So I started tracking the Wish cashtag on Twitter and found Yates Investing. I've been keeping track of his tweets ever since.

But now the ultimate question: Why is WISH the stock I'm watching today?

Honestly, it again comes down to a tweet. Specifically this tweet:

That deal was actually announced about two weeks ago. TheStreet's Dan Weil reported on it back when it came out. 

"The two-year accord will enable 300,000 merchants and brands on the PrestaShop platform to sell on the Wish marketplace. ContextLogic does business as Wish," he wrote. "Wish will enjoy “trusted partner” status on PrestaShop and will have a special landing page on the Paris company's platform for merchants."

And this tweet from yesterday:

Tim Collins, for those unaware, is a Real Money columnist and I find that he's able to keep his fingers on the pulse of the stocks being picked up by younger investors. He may not always trade them, but his commentary is insightful when I'm looking for some clarity behind momentum or stock action.

Back on June 18, he wrote up a Real Money column where he said that he'd be willing to take a shot on WISH

So, for a momentum stock, there's not a whole lot of momentum coming from a story angle. But that doesn't mean that it's not a stock to keep an eye on if you're looking to see what's caught the eye of younger investors.

Let's Talk About Robinhood and FINRA

FINRA stands for the Financial Industry Regulatory Authority. It's a government-authorized not-for-profit organization dedicated to overseeing broker-dealers in the U.S. 

Here's what it says on its website, "FINRA authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. We oversee more than 624,000 brokers across the country—and analyze billions of daily market events."

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Why does this matter?

Well, FINRA announced one of its biggest penalities today and the payee is none other than Robinhood. 

Robinhood will pay FINRA $57 million in a fine and $12.6 million, plus interest, in restitution. 

The organization didn't mince words when discussing the fine in a post on its website, either. 

"...FINRA found in its investigation that, despite Robinhood’s self-described mission to “de-mystify finance for all,” during certain periods since September 2016, the firm has negligently communicated false and misleading information to its customers. The false and misleading information concerned a variety of critical issues, including whether customers could place trades on margin, how much cash was in customers’ accounts, how much buying power or “negative buying power” customers had, the risk of loss customers faced in certain options transactions, and whether customers faced margin calls," states the post. 

But FINRA doesn't stop there. It cites the tragic suicide of twenty-year-old Alex Kearns, who died in June 2020.  

"In a note found after his death, he expressed confusion as to how he could have used margin to purchase securities because, he believed, he had not “turned on” margin in his account. As noted in the settlement, Robinhood also displayed to this individual (and certain other customers) inaccurate negative cash balances. Additionally, due to Robinhood’s misstatements, thousands of other customers suffered more than $7 million in total losses. As part of this settlement, Robinhood is required to pay more than $7 million in restitution to these customers."

The family of Kearns is suing Robinhood, alleging wrongful death.

Robinhood responded to the FINRA announcement with a blog post on its website, and a statement to TheStreet said, "Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams. We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all.” 

I think it's only fair that I point out here that many investors who have reached out to me over the past few months have said that they switched to other services from Robinhood following the outages that we saw earlier this spring. 

And, when I posted the news of the fine on my Twitter, many responses wither questioned whether this fine is more than just a drop in the bucket for Robinhood, or if this will even change anything. 

To that point, yes, we're still waiting to hear from regulators on Robinhood. 

The Securities and Exchange Commission has already been slowing the company's planned IPO down (though, if we're being honest, I'm curious to see an IPO timeline following the FINRA fine), per reports from Bloomberg. 

Robinhood's "listing plans slowed in recent weeks by a back-and-forth with regulators over its prospectus, according to people familiar with the matter," Bloomberg reported on June 24. "Robinhood’s growing cryptocurrency business, which was rolled out in 2018 and now allows customers to trade Bitcoin, Ethereum and even Dogecoin, has drawn questions from the U.S. Securities and Exchange Commission, one of the people said, asking not to be identified because the matter is private."

And, Finally, SentinelOne

Okay, maybe I should have said I had two stocks and a story to watch but I'm not interested in SentinelOne purely as a stock. 

It went public on the same day (Wednesday, June 30) as DiDi, which meant that SentinelOne was perhaps lost in the IPO noise. That does tend to happen, and who can blame investors here? There are literally thousands of public companies. 

Anyway, I did interview Tomer Weingarten, CEO, just moments after the company had its first trade

The company opened at $46 a share, well above its pricing of $35 a share. 

TheStreet's Tony Owusu noted, "The cybersecurity firm, backed by the investor Daniel Loeb's Third Point hedge fund, sold 35 million shares at $35 each. The underwriters have an option to buy 5.3 million more shares. SentinelOne raised about $1.23 billion. The deal gave the Mountain View, Calif., company a valuation of about $8.87 billion."

Weingarten and I talked mostly about the cybersecurity space in which he noted how important the sector is following the cyberattacks we've seen so far this year. 

At the end of the day, SentinelOne closed around $42 a share. 

Given all of the attention that the cybersecurity sector is getting, this stock will join a slew of others I pay attention to when gauging investor sentiment about the overall sector.