:max_bytes(150000):strip_icc()/GettyImages-2250884326-5eaa3522fea540c3af2114bbb471ca03.jpg "Wealthfront’s IPO Is Here. Its CEO Says Go-Go Speculators ‘Aren’t Our Clients’")
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Key Takeaways
- The company known for its investing platform listed on the Nasdaq under the ticker “WLTH.” In an interview, Wealthfront CEO David Fortunato said its target customers aren’t into speculative investing.
- The shares finished the day not far off their $14 IPO price.
Fast-paced speculative investing might be in vogue. But at least one money manager says it isn’t trying to make a quick buck.
Neither, it seems, are its investors. Wealthfront, a robo-advisor that promotes investing for the long haul, today listed on the Nasdaq under the ticker “WLTH.” The company’s stock opened at its $14 IPO price on what was a down day for the major U.S. indexes. It finished little changed, implying a market value above $2 billion.
The company’s public debut lands amid stiff competition to woo retail investors. Its investing platform rivals those of fintech heavyweights like Robinhood (HOOD) and SoFi (SOFI), which have ramped up growth plans with new products and services and seen their stocks soar this year. Wealthfront, for its part, offers similar services—such as stock trading, savings accounts and lending—but says it’s targeting a specific slice of the market: those interested in investing for the long-term.
WHY THIS MATTERS TO YOU
Between the rise of prediction markets, and meme-stock investing, retail investors have been characterized as a more speculative crowd than prior generations. Wealthfront’s success with a younger cohort shows that low-cost, long-term investing remains in style for many.
“There are people that want to speculate and want to trade a lot,” Wealthfront CEO David Fortunato said in an interview with CNBC. “Those aren’t our clients.” (Butressing its bona fides in that department: Burton Malkiel, author of the seminal book on passive investing A Random Walk Down Wall Street, is the company’s chief investment officer.)
Wealthfront had more than $88 billion in assets and more than 1.3 million active users as of the end of July, with nearly 80% of them born after 1980, according to the firm’s IPO documents.
The company appears to have struck a chord with millennials, with the average age of its clients around 38 years old; its products are increasingly resonating with Gen Z, those born between 1997 and 2012, the company said.
It generated revenue of over $175 million and net income of more than $60 million in the six months ended July 31, company documents show.
The company priced its IPO at the top of its marketed range at $14 per share, with the firm selling 21.5 million shares and some of its shareholders, 13.1 million. Robinhood shares finished lower on Friday, while SoFi’s edged upward.
This article has been updated to correct the opening price for Wealthfront stock, and to reflect end-of-day market data.
