Finance

British stock brokerage platform Freetrade told CNBC exclusively Monday that its long-time CEO Adam Dodds has stepped down.
He will be replaced by Viktor Nebehaj, currently Freetrade’s chief operating officer, pending regulatory approvals.
Dodds took Freetrade from a scrappy startup in the early days seeking to disrupt the world of wealth management, to an established brand with 1.4 million users.

Adam Dodd, co-founder of wealth technology app Freetrade, is stepping down as CEO.

LONDON — The boss of U.K. stock trading service Freetrade is stepping down and leaving the company with immediate effect, the company told CNBC exclusively Monday.
Adam Dodds, who co-founded the company with business partners Davide Fioranell and Viktor Nebehaj in 2016, will be replaced by Nebehaj, currently Freetrade’s chief operating officer, as CEO, pending customary regulatory approvals.

Dodds remains the largest individual shareholder in Freetrade, owning a roughly 12% stake, according to company filings. He won’t be involved in the day-to-day operations of the company from now, however a Freetrade spokesperson said he’ll continue to support the company’s evolution from the “outside.”

‘We almost died so many times it’s hard to count’

Dodds felt it was the right decision to leave the company and have Nebehaj take the reins as it enters the next stage of its growth trajectory, which includes plans to push out new products including bonds and mutual funds, tax wrappers, and its web platform, as well as grow its core profitable U.K. userbase.

The Freetrade logo on a smartphone screen.
Rafael Henrique | Sopa Images | Lightrocket | Getty Images

“When reflecting on the journey from idea to over a million users with billions in assets, it’s getting through the tough times you remember the most,” Dodds said in comments shared with CNBC. “We almost died so many times it’s hard to count.”
“Now, after putting up our first profitable quarter and with the business on a strong sustainable footing, it’s time to hang up my skates. Freetrade is default alive and ready to take on the incumbent platforms in the UK with self-sustaining growth,” Dodds said.
Dodds added: “I’m very happy to say Viktor will be stepping up to take over the helm as CEO. I’ll be doing everything I can to support him and the company from the board. As for me I’m looking forward to getting to know my kids better, annoying my wife on the farm, and finally getting my pilot license.”

Nebehaj, Freetrade’s incoming CEO, applauded Dodds’ eight-year run as CEO and said that “it’s natural that different stages of a company’s growth require different leaders.”
“With our first profitable quarter behind us, I’m excited about the size of the opportunity ahead,” Nebehaj said in a statement. “Our talented and high-quality team is building the right product for our customers.”

Perry Blacher, Freetrade’s board chairman, said that Nebehaj “is ideally placed to lead Freetrade from strength to strength.”

Wild few years

Dodds’ departure follows a wild ride for the company in recent years. Dodds took Freetrade from a scrappy startup in the early days seeking to disrupt the world of wealth management, to a 150-person company with over 1.4 million users.
In 2020, Freetrade was onboarding thousands of users a day as retail trading activity boomed in the wake of the GameStop stock-trading saga, which saw a community of hardcore fans of the U.S. video game retailer drive up the price of the company’s share price.
More recently, it’s been forced to tighten its belt as the reality of a gloomier macroeconomic environment set in. In 2022, Freetrade announced measures to lay off 15% of its workforce as sought to push toward profitability.
The following year, Freetrade raised £2.3 million ($2.9 million) in a crowdfunding round on Crowdcube at a valuation of £225 million — a 65% discount to its earlier £650 million valuation. Freetrade at the time blamed a “different market environment” plagued by higher interest rates and inflation.
More recently, the firm has had news to cheer about. Freetrade reported its first-ever quarter of profit in the three months through March, according to unaudited financial statements shared with CNBC in April. Preliminary revenues hit £6.7 million for the quarter.
Freetrade still generated an annual loss of £8.3 million in 2023, down from the £28.8 million loss it racked up the year prior, while revenues climbed 45% to £21.6 million in the same timeframe. More

A man passes by a GameStop location on 6th Avenue in New York, March 23, 2021.
View Press | Corbis News | Getty Images

GameStop shares rallied more than 40% in premarket trading Monday after “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, posted online for the first time in roughly three years.
The post, a picture on X of a video gamer leaning forward on their chair as if to indicate he’s taking the game seriously, marked Roaring Kitty’s first post on the platform — or on Reddit— since 2021.

Roaring Kitty, whose legal name is Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance. Also known as DeepF——Value on Reddit, Gill drew an army of day traders who cheered each other on and piled into the brick-and-mortar video game stock, and GameStop call options, between 2020 and 2021.
The “meme stock” frenzy involved individual investors taking aim at short sellers and hedge funds who were pessimistic about the outlook for GameStop and other companies, forcing them to cover their short positions and drive up the price of the target stocks. Currently, the short position in GameStop shares amounts to more than 24% of all its shares that are freely-available to trade, also known as the float.
The poster child was hedge fund Melvin Capital, which was heavily shorting GameStop and became a target of the army of amateur traders, suffering huge losses that prompted Ken Griffin’s Citadel, as well as Point72, to backstop Melvin’s finances with close to $3 billion in support.
The GameStop mania that drove its stock above $120 a share, split-adjusted, in early 2021 from as little as $3 in the space of three months, forced brokerages including Robinhood to limit trading in heavily shorted stocks. In response, one Robinhood user filed a class-action lawsuit following the app’s decision to restrict GameStop trading on its platform. The suit was dismissed in August 2023.
Another class-action lawsuit brought against Gill alleged that he pretended to be a novice trader despite being a licensed professional.

The volatility spawned a series of Congressional hearings around brokers’ practices and gamifying retail trading, and testimony from leaders of Robinhood, Melvin Capital, Reddit and Citadel, as well as Gill. The entire episode finally inspired the 2023 movie “Dumb Money,” in which Paul Dano played Gill.

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In January 2021, GameStop shares hit an all-time high of $120.75 intraday, adjusted for a subsequent 4-for-1 stock split in the summer of 2022. But as interest from individual investors eventually faded, the stock collapsed along with other meme stocks such as AMC Entertainment Holdings. GameStop last month hit a three-year low of $9.95.
Recently, the stock has started to move higher, which may have rekindled Gill’s interest, along with the enormous amount of short interest in the stock. GameStop has soared 57% so far in May, closing Friday at $17.46.
But the fundamental business at GameStop, evidenced by its most recent earnings report, shows a discouraging picture at the video game company. In late March, GameStop said it had cut an unspecified number of jobs to reduce costs, and reported lower fourth-quarter revenue amid rising competition from e-commerce-based competitors.
GameStop posted revenue of $1.79 billion in the fourth quarter, compared with $2.23 billion in the same quarter a year earlier. More

A group of around 1,500 homebuyers say they have yet to see the apartments they paid for about eight years ago, as challenges persist in China’s property sector.
The promise was they would be ready by 2019, but the majority are still unfinished, according to five of the homebuyers, who requested anonymity out of fear of retaliation.
“I feel like I’ve been tricked this whole time,” one buyer said on Monday in Mandarin, translated by CNBC.

People wait at the train station of Wu Qing, Tianjin, on January 8, 2016.
Fred Dufour | Afp | Getty Images

BEIJING — A group of around 1,500 homebuyers in the Chinese city of Tianjin, near Beijing, have yet to see — let alone move into to — the apartments they said they paid for about eight years ago.
As is common in China, the apartment complex in Tianjin sold the units before they were completed. The promise was that they would be ready by 2019, but the majority are still unfinished, according to five of the homebuyers, who spoke to CNBC via telephone but requested anonymity out of fear of retaliation. The buyers are a mix of people who paid in full upfront but also in smaller installments. Their concerns are just one example of the wider challenges that persist in pockets of China’s property sector.

Following early efforts to recoup their money or to garner information about their property purchases, a few buyers said police visited their homes, sometimes in the middle of the night.
“I feel like I’ve been tricked this whole time,” one buyer said in Mandarin, translated by CNBC.
“My only request is that I can return the house and get my money back,” the buyer said. “Even if I am able to get the house, I will feel bad.”
Some buyers said they had bought the apartments as a place for their parents to retire, or for their children to attend school nearby. In the eight years of waiting to move in, one buyer said one of their parents had died while waiting for the new home, and another said their child had grown up and found another school instead.

Asking buyers for more money

The developer in this case, Zhuoda Yidu, late last month asked homebuyers to approve a dispute settlement, a copy of which was seen by CNBC.
The document said the apartments could be completed in 2025 or 2026 if the buyers agreed in the next few weeks to pay any outstanding balances on their property purchase, along with other costs as determined by the developer.
The proposal did not offer an alternative, and said the properties must be valued at pre-market slump prices — or about double or more than the current level, according to comparisons with listed brokerage prices. That’s not to mention eight years of wear and tear, and the possible disruption to the families’ life plans.
“The money for the down payment was from my dad,” one buyer said of a house bought in 2016. “I can’t tell him it’s not finished. During Covid I told him there were delays. Now Covid is gone and there are no excuses.”
In addition to paying in full for that apartment, this one buyer is still paying a monthly mortgage of about 2,800 yuan for a second apartment in the same complex, which was meant for a relative.
The situation has fueled a sentiment of feeling that no matter how much money is spent, the buyers will never get their homes, one of the sources said. The individual noted that in a group chat of around 500 fellow buyers on social media roughly 90% rejected the developer’s proposal.
Zhuoda Yidu was not available for comment, despite multiple CNBC attempts to call and email the company and its representatives. A lawyer handling Zhuoda Yidu’s bankruptcy and liquidation case referred CNBC to the Tianjin Wuqing District People’s Court for comment. The court did not respond to CNBC.
Wang said it was the first she’d heard of homebuyers having to pay more to get their finished apartments.
She said prior to the Covid-19 pandemic there were sporadic cases of delayed deliveries, especially in cities such as Tianjin, where real estate development surged in 2014 and 2015. She said that at the time local authorities and developers would typically find a solution quickly since it involved a lot of money for an average family.
Interest in Tianjin and other areas surrounding Beijing surged prior to the pandemic as people working in China’s capital city looked for more affordable housing options at a time when prices were near a peak.
Beyond China’s recent real estate woes, the homebuyers’ dilemma has its roots in a household registration system — called hukou — which dictates where one’s children can attend public school, among other benefits. Cities such as Tianjin have also used hukou policies to attract new residents.
But Wang noted an increase in delivery delays after Covid, as developers struggled to keep operating, resulting in a “systemic problem.”
China’s top leadership said at a meeting in late April they would continue to work to ensure the delivery of homes and protect homebuyers’ interests.
China’s Ministry of Housing and Urban-Rural Development and its local unit in Tianjin’s Wuqing district did not provide a comment when contacted by CNBC about this story.
The developer Zhuoda is far from being one of China’s largest. Some of the homebuyers who spoke to CNBC said that after making initial payments, they found out the property in question was not necessarily a certified project.
In a sign of issues with the project early on, the official “Tianjin Daily” newspaper reported back in March 2017 that the same Xiyu Garden project constructed by Zhuoda Yidu Investment in the Wuqing district of Tianjin violated the city’s real estate transaction rules by collecting money from buyers without obtaining a license for commercial housing sales. The report said local authorities imposed penalties and ordered rectification. Records accessed via business database Qichacha showed Zhuoda Yidu didn’t get licenses for commercial housing sales until August 2018, although it had received construction permits for part of the project as early as 2016.
One homebuyer confirmed to CNBC that after the incident described in the Tianjin Daily report, the buyers were able to get a purchase certification.
The buyers of the Tianjin apartments interviewed for this story said they knew of an unsuccessful effort to get the project on the central government’s list of unfinished homes (which would usually guarantee financing until completion), although it was unclear whether that was due to the project’s certified status. Some saw the latest proposed dispute settlement as a response to central policy changes, since it was a path toward finishing construction instead of leaving the project hanging.
The real estate sector’s troubles have also weighed on local government finances, which once generated significant revenue from sales of land to developers.
Among high-income Chinese cities, Tianjin has one of the highest debt levels relative to GDP, according to S&P Global Ratings.
For many households, real estate has accounted for the bulk of their wealth, often the result of grandparents and relatives pooling their savings.
One home buyer sunk 190,000 yuan into what was a 700,000 yuan purchase of a two-bedroom apartment, 90 square meters large, in the unfinished Tianjin apartment complex.
That’s several years’ worth of savings. The average per capita disposable income in 2023 for Beijing city residents was 88,650 yuan, and 51,271 yuan in Tianjin, reflecting the far lower cost of living.
“We don’t have that much money,” the buyer told CNBC. “If we had enough money we would be buying in Beijing.” More

Pearls, it is said, represent purity. They may soon stand for something else: business dynamism. In Greenville, South Carolina, two locals have created earrings that look like jewels, but contain a cluster of microelectronics to track body temperature, heart rate and even the wearer’s menstrual cycle. Incora Health was established in 2022. It plans to start selling its earrings, currently in clinical trials, in a few months. “We’re first-time founders in a small city trying to change women’s health care, and that’s not lost on us,” says Theresa Gevaert, a co-founder. But the audacious young firm is part of a wave of startups that have been launched in America over the past few years. Many will fail. Some will succeed. Together they suggest profound change is afoot.America has a deserved reputation as a country at the cutting-edge of innovation, fuelled by entrepreneurial vim. But in recent years some economists have worried that this reputation no longer holds true. Startups have formed a smaller and smaller portion of the business landscape: in 1982 some 38% of American firms were less than five years old; by 2018, 29% were that young. The share of Americans working for startups likewise fell. Silicon Valley sizzled with high-tech wizardry, but its giant companies hoarded the best researchers, leading to a slower spread of new ideas throughout the country. Researchers, including at the Federal Reserve, pointed to this decline in dynamism as a principal cause of weaker productivity growth. More

It’s an exchange-traded fund designed to profit from higher rates.
But even if the Federal Reserve starts to cut this year, Horizon Kinetics’ James Davolos thinks his firm’s Inflation Beneficiaries ETF (INFL) is in a sweet spot. 

“We’re actually going into the mature phase of inflation,” the firm’s portfolio manager Davolos told CNBC’s “ETF Edge” this week. “I think we’re actually ideally positioned.”
Davolos expects a new world stuck with inflation between three and five percent.
“The Federal Reserve basically just admitted last week that we’re going to prioritize the economy and employment and accept these higher inflation levels,” Davolos said. “I don’t think most portfolios are properly designed for that.”
Horizon Kinetics created the Inflation Beneficiaries ETF in January 2021 as inflation started to rise after the Covid-19 pandemic quarantine. Today, Davolos sees the fund as a strategic tool to help diversify investors’ portfolios.
According to Davolos, the ETF’s goal is to cushion portfolios in a higher for longer environment by investing in companies that are considered “asset light” and “capital light.” As of April 30, FactSet shows the Inflation Beneficiaries ETF’s top holdings include Wheaton Precious Metals, PrairieSky Royalty and Viper Energy.

So far this year, the ETF has underperformed the S&P 500 by about five percent. But Davolos thinks the gains from inflation-oriented ETFs have more long-term stability than the current megacap rally.
“We’re in a new reality. People keep buying tech, not realizing we’re higher for longer, and there’s a duration aspect to those names,” Davolos said. “So, I expect this to continue reversing and reversing sharply as we get through the remainder of this year.”
As of Friday’s close, the Inflation Beneficiaries ETF is up 30% since its inception.
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Artist Yu Shu creates sculptures of Charlie Munger. 
Courtesy: Yu Shu

OMAHA, Neb. — A 24-inch tall, bronze bust sculpture of the late Charlie Munger became a conversation piece for guests who lodged at the Omaha Marriott last weekend for the Berkshire Hathaway annual meeting.
The hotel, next to Berkshire-owned jewelry store Borsheims, was the preferred quarters for the investment icon, who passed away in November at the age of 99, whenever he visited his hometown and the Berkshire headquarters of his longtime partner and confidante Warren Buffett.

The sculpture, placed in the lobby accompanied by glasses of champagne and brochures, soon grabbed the attention of numerous Berkshire shareholders who walked by and also two special admirers — Munger’s own daughter Wendy and his longtime executive assistant Doerthe Obert.
“I got back to the lobby and the hotel staff was like ‘Doerthe came down twice to look for you,'” Yu Shu, the 39-year-old artist behind the sculpture, told CNBC in an interview. “Then they called Doerthe and she came down. I gave her a hug, and I told her ‘nice to see you again’ and she’s like ‘we’ve never met before.'”

Arrows pointing outwards

Artist, Yu Shu poses for a photo with busts of Charlie Munger.
Courtesy: Yu Shu

This was indeed not the first time Yu met Obert. The real estate agent-turned artist, herself a Berkshire a shareholder, paid an unexpected visit to Munger’s home in Los Angeles in March 2023, hoping to meet Munger and tell him about the sculpture in the works. While she was declined a meeting, she asked for close-up shots of his profile from Obert in order to fine tune the facial details.
It took a total of 12 months and a number of attempts for Yu to finish the final version of the Munger bust. A visitor to 10 Berkshire annual meetings, she said she was inspired by a piece of life advice from Warren Buffett to turn her love for art — and Berkshire — into a business.

Artist Yu Shu creates sculptures of Charlie Munger. 
Courtesy: Yu Shu

“His words at the 2022 annual meeting resonated with me; ‘If you do what you love, you will never work a day in your life.’ I was like ‘how could I transform my passion into a business?’ Yu said.

Copies of the full-sized bronze busts are available for $19,500 each, while half-sized cold cast bronze busts are priced at $595. The artist, who grew up in Chengdu, China and currently divides her time between Denver and Taiwan, said she’s working on big-sized Buffett sculptures right now.
“Charlie Munger has always been a personal hero of mine, so he was the subject of my first sculpture,” Yu said. “Creating a bronze sculpture is so similar to value investing; it requires patience and persistence.”
Last weekend, a longtime Berkshire shareholder purchased the Munger bust, the one that once adorned the Marriott lobby. The buyer preferred to remain anonymous but said he hopes to give the artwork to the Munger family.

Arrows pointing outwards

Yu Shu poses for a photo with Greg Abel during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska.
Courtesy: Yu Shu More

The U.S. banking industry won a key victory in its effort to block the implementation of a Consumer Financial Protection Bureau rule that would’ve drastically limited the fees that credit card companies can charge for late payment.
A federal court on late Friday approved the industry’s last-minute legal effort to pause the implementation of a regulation that was announced in March and set to go into effect on Tuesday.
In his order, Judge Mark Pittman of the Northern District of Texas sided with plaintiffs including the U.S. Chamber of Commerce in their suit against the CFPB.

Rohit Chopra, director of the Consumer Financial Protection Bureau, speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., Dec. 15, 2022.
Ting Shen | Bloomberg | Getty Images

The U.S. banking industry won a key victory in its effort to block the implementation of a Consumer Financial Protection Bureau rule that would’ve drastically limited the fees that credit card companies can charge for late payment.
A federal court on late Friday approved the industry’s last-minute legal effort to pause the implementation of a regulation that was announced in March and set to go into effect on Tuesday.

In his order, Judge Mark Pittman of the Northern District of Texas sided with plaintiffs including the U.S. Chamber of Commerce in their suit against the CFPB, saying they cleared hurdles in arguing for a preliminary injunction to freeze the rule.
The outcome preserves, at least for now, a key revenue stream for the U.S. card industry. The CFPB estimates that the rule would’ve saved American families $10 billion a year in fees paid by those who fall behind on their bills. It would’ve capped late fees that are typically $32 per incident to $8 each and limited the industry’s ability to hike the fees.
It is now unclear when, or if, the new regulation will go into effect.
“Consumers will shoulder $800 million in late fees every month that the rule is delayed — money that pads the profit margins of the largest credit card issuers,” a CFPB spokesman told CNBC on Friday.
The industry’s lawsuit is an effort to block a regulation “in order to continue making tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual costs,” the spokesman said.

The CFPB has said the industry profits off borrowers with low credit scores by charging them ever higher late penalties over the past decade, while trade groups have argued that the fee caps are a misguided effort that redistributes costs to those who pay their bills on time.
The Consumer Bankers Association, which is one of the groups that sued the CFPB, said it was “pleased with the District Court’s decision to grant a preliminary injunction to stop the CFPB’s credit card late fee rule from going into effect next week.”
The CBA said it will continue to press its case in the courts on why the CFPB rule should be “thrown out entirely.” More

Sweetgreen shares jumped by 34% on Friday after the company reported better-than-expected revenue results for its fiscal first quarter.
The salad chain also raised its revenue and adjusted EBITDA guidance for fiscal year 2024.
The company announced earlier this week that it’s adding steak to its menu in an expansion of its protein offerings.

People dine outside a Sweetgreen in Manhattan.
Jeenah Moon | The Washington Post | Getty Images

Sweetgreen shares surged nearly 34% on Friday after the company topped Wall Street’s revenue expectations for the fiscal first quarter and raised its full-year forecast. The salad chain also announced earlier this week an expansion to add meat to its menu for the first time.
The salad chain reported $158 million in revenue, beating the LSEG consensus estimate of $152 million. Revenue jumped 26% from $125.1 million in the year-earlier period.

The company reported a net loss of $26.1 million, a loss of 23 cents per share. In the year-ago quarter, the company’s net loss was $33.7 million, a loss of 30 cents per share.
Sweetgreen also raised revenue and adjusted EBITDA guidance for the full year. Shares of the company are up 179% so far in 2024.
Here’s how the company did compared to LSEG analyst estimates:

Loss per share: 23 cents
Revenue: $158 million vs. $152 million expected

Jonathan Neman, Sweetgreen CEO and co-founder, said on an earnings call with analysts that the company opened six new restaurants in the first quarter. Neman highlighted the success of the South Lake Union location in Seattle, which “had one of the strongest opening weeks in the company’s recent history.”
“Openings like these demonstrate that our brand has significantly greater reach than our current physical footprint and that there is massive white space for our category-defining concept,” he told analysts during the earnings call after the close of trading on Thursday.

Sweetgreen began deploying robots for tasks like dispensing greens and mixing salads in its restaurants last year. Dubbed the “Infinite Kitchen,” the robotic technology was first implemented in May 2023 with the opening of the company’s pilot store in Naperville, Illinois.
Neman added that the company remains “on track” to open about seven new automated Infinite Kitchen restaurants in 2024 and plans to establish more next year. Analysts were “impressed” by the early results from the Infinite Kitchen locations, according to StreetAccount.
The company announced Tuesday it’s adding steak to its menu in an expansion of its protein offerings with a caramelized garlic steak protein plate, a steakhouse chopped warm bowl, and a kale Caesar steak salad.
“During our testing phase in Boston, we saw Caramelized Garlic Steak quickly become a dinnertime favorite, with steak making up nearly 1 in 5 dinner orders,” said Nicolas Jammet, Sweetgreen’s chief concept officer and co-founder, in a press release. “We’re thrilled to bring customers more of what they are craving at every part of the day.”

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