Michael Bolton takes on Robinhood in a new viral video

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In the strangest twist to date in the already bizarre Robinhood saga, Bolton sings about payment for order flow in a YouTube video published by rival online brokerage Public.com.

“I could hardly believe what I saw on Reddit today,” he sang. ‘I was hoping I could get it straight from you. They told me about the order flow so I googled, now I know. I think I should find someone new. ‘

Bolton continues, “So tell me all about it. Tell me who you sell my transactions to. ‘

The criticism of pop culture underscores the tremendous attention being paid to how Robinhood and other brokers have adopted commission-free business models. Critics say trading isn’t really free and fast Wall Street trading firms are getting the better end of the deal.

The YouTube video was published by Public.com, citing Will Smith, JJ Watt, Dick Parsons and The Chainsmokers as investors and advisors. Last week, just before Robinhood CEO Vlad Tenev was grilled by Congress, Public.com announced it will no longer accept revenue in exchange for routing trades to market makers.
“The main criticism of PFOF [payment for order flow] is that it creates a mismatch between the broker’s financial goals and the interests of its clients, “Public.com said in a blog post.

During the introduction to its issue, Bolton pointed out that Public.com says it does not sell transactions to third parties.

‘I know a thing or two about falling apart. And I’m here to help, ”said Bolton.

Robinhood has consistently championed the use of payment for the order flow, which accounts for more than half of the company’s revenue.

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“Robinhood’s customers benefit greatly from payment for order flow as market makers typically offer better prices than public exchanges,” Tenev said in his prepared remarks last week.

In the first half of 2020 alone, Robinhood estimated that its customers received more than $ 1 billion in price improvement – the price they received compared to the best price on a public exchange.

Citadel Securities, the high-speed trading firm to which Robinhood sends many of its orders, has similarly championed the practice.

“It is a major reason why private investors today can trade for free or at low commissions,” Citadel Securities founder Ken Griffin said at the hearing.

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