Robinhood Markets Inc (NASDAQ:HOOD) suffered losses at the start of the week after a series of bad news.
The trading platform may soon have a new competitor after it was reported that PayPal (NASDAQ:PYPL) Holdings Inc is exploring how to allow customers to buy stocks and shares on its website.
READ: Deutsche Bank says exceptionally attractive Robinhood Markets is a ‘hold’
The payments giant has 400mln accounts and started providing cryptocurrency trading earlier in 2021. It previously said its total addressable market, including payments and asset trading, is US$110 trillion.
Robinhood extended its losses after Gary Gensler, chair of the US Securities and Exchange Commission, told Barron's that payment for order flow has "an inherent conflict of interest".
This method is what allows Robinhood to go commission-free, as its customers’ orders are sent to wholesale brokers instead of exchanges.
The SEC is investigating the practice amid concerns that brokers will send customer orders to trading platforms to boost profits, instead of focusing on what’s best for the customers.
Shares closed 7% lower on Monday and were down another 1% to US$43.07 in after-hours trading.