Public co-founder Leif Abraham: millennials are buying the dip, retail investors cycling out of yield accounts into stocks at record pace

gone. That's good. I was just I had my I had my caffeine already, so that's why I'm like, good. Fantastic. Good. Somebody was commenting yesterday about our caffeine consumption, and I was like, yeah, it's easily easily 500 milligrams plus at this point.

Uh John, that's 500 milligrams during the show often times, but he's like built like a horse, so he can he can take it. Uh how how are you doing? Uh uh we were just joking about uh whether or not you had slept at all the last week.

Um I know it's been a busy, you know, I'm sure it's been a busy time for you and the and the whole team. It's been busy, but our system have our systems have been have been up at least compared to other folks. So that's great. Yeah, that's good.

Um, walk us through uh some of I mean I'm mostly curious to hear uh you had shared on X yesterday about how there had been more buyers than sellers over at least in certain moments over the last week. Um uh maybe break down that data point and and and then we can talk about some other stuff uh that's top of mind.

Yeah, I mean generally speaking, just like a mini step back is like this generation of investors like call especially millennials like man they have been through market cycles like crazy in the past five years, right?

And oh yeah or even just like through their lifetime and like I even saw some of like some meme on on X the other day of like millennials experiencing the fourth once in a lifetime opportunity of a drop in the market, you know, and so on.

And I think especially like the March 2020 drop where like circus breakers hit and so on crazy is still in people's minds. And I think that specifically because you saw a lot of um like individual investors actually also making money on that.

Um and I think that has stuck with a lot of people and so generally speaking this behavior of buying the dip is a little bit retail investing culture now. Mhm. And so whenever you see these like massive drops, this is really when we see some of our best days. Yeah.

My reaction yesterday was like, you know, one of our record days in just deposits, for example. And Yeah. But yeah. Yeah. Well, my reaction, uh, you know, the stock market was down 5% backtoback days. And I was just like, what what is everyone complaining about? We're not even hitting circuit breakers.

Like, this is not that crazy to me. Because I remember 2020 and it was way crazier. Uh, but of course, like it's very serious. Can you actually break down the mechanics of what it like the like what exactly is happening and and what what truly triggers the the circuit break?

Yeah, this is I don't have the exact numbers in front of me, but it's essentially just if it drops too quickly to you know specific thresholds um I believe it's 7% and then 10 and 15 or so um essentially they pause the markets and that didn't used to exist in the past, right? Yeah.

Um and so it's essentially like a little bit of like a safety trigger, like a speed bump to, you know, make sure that investors can take a breather um when these markets start to drop uh uh uh too quickly. Yeah, in Japan, don't they have lunch break in the middle of the They do not just in Japan, other countries, too.

Yeah, other countries too. I love that. Uh but yeah, it makes sense. I mean, we I a couple years ago when the algorithmic trading got really popular, there was like the flash crash. Uh I think the market traded down like 20% in like two seconds and then went back up. Uh and yeah, obviously you want to avoid that.

Um what about overnight trading? You always hear, oh, you're watching the futures market and uh it seems like somebody has an edge here that they can trade before the market opens. Uh how is 247 trading coming to America? We've heard some rumors. Is there a way to get in on that action?

Generally speaking, I think it's definitely coming like it will also come to public at some point. Um, right now we essentially have, you know, 4:00 a. m. to 8:00 p. m. Um, but the thing that you have to think of is that each trading window has its own participants and its own liquidity and execution venues. Mh.

And so, think of it as like there's the regular opening between your 9:30 and 4 p. m. That's the most liquidity. It's when like most people participate. Um, you could call that the healthiest time in the market in theory. Then you have essentially pre-market and postmarket which is you know 4:00 a. m.

to 9:30 and uh you know 4:30 to 8:00 p. m. And then you have overnight which is like the new thing overnight right now there's essentially only like one major player who drives the liquidity for that.

And what happens there is that because you have um only one player, you have a lot of um like or like you have you have not as many platforms participating yet. And so you can have these moments where there's a lot of kind of unilateral flow happening.

And that's why in the in the in the overnight markets, you often see certain stocks just suddenly rally or so on.

And that is a little bit I don't want to call it fake, but it's a little bit like it has these wild swings because the the types of people that trade in those times of the market and it's a concentrated liquidity pool. And so, you know, these swings just happen, you know, way more dramatically.

And so you often have these moments where like in overnight a stock goes up and you see on Twitter everyone's like sorry on X everyone like posting the screenshots of like oh my god you know Palanteer is going nuts right now or wherever the company might be and then suddenly like 9:30 market opens and it just goes down and everything kind of normalizes again right and that is really just because each market window has their own participants and their own pools of liquidity and so you kind of have to take a little bit with a grain of salt like can you play that maybe, but there's obviously some risk there as well.

Can you talk a little bit about information diets? Uh, and really I want to know what events that are predictable, not like Trump imposing massive tariffs all of a sudden on Liberation Day, but what can we count on like clockwork every single day to be the highest volume day of the year?

Is there a Super Bowl of of stock trading that happens whether it's earnings day or jobs day? Uh what what are the big reliable sources of high liquidity in the market? Um I don't know if I have a good answer there.

My my gut reaction would be just from internal measures like Monday mornings because you have all you have a lot of cute orders from the weekend and stuff like that. Yeah, makes sense. Get executed at the open. Okay.

Um because not everyone will trade pre-markets and stuff because spreads are wider and all this all these things. Um but um specific days, not really sure to be honest. Maybe like big tech earnings too is kind of like a season for that. But generally speaking, Exactly.

Like it's always like it's often just driven by market events, right? In the end at the end of the day, um people will trade when they see opportunity. Yep. And if you can predict that, let's start a hedge fund together tomorrow.

But other than that u but other than that you know it's it's like it is driven by these by these moments right and whenever like we have good days when the markets are in the news no matter which direction but as long as the markets are in the news we have good days because people get inspired one way or the other.

Yeah. And you know so so in a way trading volumes for companies like ours are a little bit like competing with any other thing that competes with attention because uh you know if markets in the news you get inspired by something and that might drive action and that's what we see. Yeah.

What do you see from a demographic standpoint? I'm curious. So public obviously offers access to bonds which you know it was a probably good to be in bonds. you know, if you sold uh last week before liberation day. Uh but but do you see a lot of demographic differences?

You know, sort of like Gen Z's basically like uh bonds for me are just like, you know, GameStop, right? Like I you know, I always know it's going to be worth something. It's a store of value. It's a store of value, right?

Uh but I'm curious if you see sort of um pretty specific uh activity across different demographics in terms of interest in these different types of assets. Yeah, I mean straight up bonds always skew older just from the perspective of the older you get the more you're like thinking of preservation versus growth.

Um but then I think what's interesting now is that so we've launched multiple yield accounts essentially. So you have your high yield cash which is you know similar to savings account you just get your yield and it's variable based on interest rates and such.

Then you have like your bond account which is essentially like a basket of corporate bonds underlying and then you have like your treasury account which is like US government treasuries and those kind of simplify the investments into bonds because you just deposit money earn yield.

It's like very simplified and just like you don't have to like pick certain bonds and stuff like that. So what we've seen is with that is that um a lot of people are using those to just put money into the markets waiting for these moments of of uh um like of opportunity, right?

So what we've seen in the last few trading days essentially is that people cycle out of the the yield accounts and into stocks and ETFs because they essentially had this cash lying around and we're like okay you know anecdotally what we've been hearing a lot is that like hey after Trump was elected and the market started ripping and there were you know all-time highs and a bunch of things going on all the time that there was also a bunch of you know individual investors who were essentially feeling like oh I'm just buying the top right now and so they put it into these yield accounts but then also So the minute you saw things drop the way they've done now they've basically cycled it out of the yield accounts into stocks in ETFs specifically.

So so so you're seeing younger generations think using it less as a hey I'm going to now actually hold the bond to maturity 10 years from now and more use like these account ties that we've created for you know just like earn some yield on your stuff you know uh until you um you know actually see other opportunities.

Yeah. Do you think AI is already h helping retail investors better understand the companies that they're investing in? Right. Every public company is putting out a huge amount of information unless you're becoming just overly uh obsessed with this specific stock.

It's hard to figure out what's what's important, what should I be looking at. Um uh what have you guys seen? I know I know you've like, you know, released products uh to help people leverage all of that data with AI, but um I'm curious what you're seeing. That's a great layout, Joey, by the way. Thank you.

My pitch, you know, thankful sponsor. Yeah, but uh uh yeah, 100%.

And like we obviously launched alpha which started off by just you can swipe down on any stock ask any question about the stock and um you know and that just created this like bite-size researching for for things and we've kind of fed the model with a bunch of data that we already had from years ago like for example we acquired a company like three four years ago that was essentially a tool that turned all the SEC filings that had you know custom company KPIs of like subscriber numbers and you know how many cars Tesla shipped and things like that into more structured data and then then we use that structured data to kind of train our models and such to make that very easily accessible.

Now what now has happened is that it's much more proactive than you know than just you kind of have to pull information. And so the obvious one is what we call why is it moving which is essentially if a stock is going in either direction very heavily.

We kind of pop this card on that page and tell people you know the like why this thing is likely moving right now. And then you can tap on that that brings you into a conversation with alpha gives you a more you know granular breakdown on that.

And so it's much more the the pulling versus the like much more like the the pushing versus the pulling. And I think that's also just generally where where it's where where it's going.

But but like what's awesome to see is that these like these like bite-sized contextual moments where AI can be super fast where it's just really great at summarization. Yeah. And can also go against biases, right? So like if we go for news stories for example, we sort of say like QA multiple sources.

So we're not just coming from one source and pop it to you, but we QA multiple sources and then the summarization comes from the multiple sources. And so there is a little bit of like QA built in and a little bit of like taking the bias out that maybe one writer will have or something. Yeah.

Speaking of which helpful speaking of data quality, what what do you think uh do you know yesterday Walter Bloomberg, you know, shared shared some news that that wasn't quite uh accurate. It moved the market, you know, trillions of dollars.

Um maybe helped us avoid whatever it was black black Monday Kramer was calling it.

Uh what do you think is uh do you think that do you think that there's any like solution to that or it's just the nature of the internet where now you have these accounts that basically act they publish they're basically like mainstream media except they just publish headlines. They're not doing any journalism.

They're not even looking at data. They're just sort of like trying to be the first or second or third big account that's like sharing a headline. Is there any is how what's the fix there? Right.

Is there one or is that just the nature of the internet where this sort of information breaks and then markets are going to react really quickly? Um, and now retail investors are so ready to act on information.

You know, a good example was like if you just happened to be on X when Trump posted Trumpcoin and bought 20 grand of it, you became, you know, a millionaire within within a few hours.

But I'm curious like if you've thought at all about like how um yeah, just just I I don't know if there's I don't know if there is a solution, right? It's just Yeah.

But I think it's I we always come back to um who are you building for and therefore what behavior is is your product inspiring and you know and generally speaking what like the way you design your product will always have an impact on how people use it and their behavior.

And um in our case, you know, yeah, you cannot you can buy a Bmecoin, you can do options trades, but generally speaking, the way we've designed the product and the offerings that we have are more focused around building long-term portfolios for people that want to, you know, compound their wealth over time.

You know, the all the fixed yield uh the fixed income offerings that we now have, etc. And I think there are just certain design decisions that that um impact in the end the behavior of like like of these users, right?

And yeah, therefore in the end I think that is much more important uh uh for for people to make healthy investment decisions than necessarily you know uh like like how they consume and so on.

like like like that behavior you're you're you're talking about is obviously not necessarily coming from the potential wrong information from some ex account that behavior is more cultural or how they were trained when they started being in the markets you know and so I think that is that is much more the sense of like if the platform you're using is closer to gambling you will end up being more of a gambler automatically just based on the design of how you were introduced to the markets and therefore you will be more prone to you know potentially react on these types of things because you're inst investing style would be closer to a gambler than maybe someone who tries to compound their wealth over time and you know is cycling money out of a hiker account into you know Amazon stock or whatever because they see an opportunity that to to then also hold it for the long term and so on.

So I think that's much more the the the issue so to say than than than those accounts. Um I have a bunch of other questions but I think we're I think we're over we'll have to have you back on very soon. Um, I know you got some big uh stuff in the works. Thanks for coming on. Yeah, I'm excited for the announcements.

This will be great. We'll talk to you soon, man. See you. And we have our last guest of the show announcing a $30 million series B, the smallest round of the day. It's rough out there. What is this around for ants? I don't want to talk too much trash. I very It's It's great. It still gets a size gong hit.

Um, but it it is funny. We've seen a bunch of huge rounds today. Uh it's a good day in the markets. Uh the markets, the public markets are down, but the private markets are ripping. Let's bring in the founder and CEO of Arena AI. Uh today he's announcing a $30 million series B and and introducing Atlas, an AI hardware