- In the race to free trading and fractional shares,
there are new companies popping up all the time,
but Public isn't new.
It's actually a rebrand
of one of the first app-based investing products
called Matador.
However, they have cleaned up their app,
made it easier to use,
and continue to focus on their social network features.
Plus they offer commission-free investing
and fractional share investing.
How do they compare now that most major brokerage firms
also offer commission-free trading?
Well in this video, let's review how Public stacks up.
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Okay, what is Public?
Well, Public is an app-based stock brokerage company
that doesn't charge commissions on trades.
It was founded in 2017 and there are four founders,
Jannick Malling, Matt Kennedy, Peter Quinn,
and Sean Hendelman.
The company's legal name is Public Holdings, Inc,
doing business as Open To The Public Investing, Inc,
a registered broker dealer and member of FINRA and the SIPC.
Again, Public used to be called Matador,
but later changed the front-facing name of the company
to Public.
On February 17th, 2021,
Public announced that it had raised $220 million
in a Series D round at a 1.2 billion valuation.
The investors include Accel, Greycroft, Lakestar,
Will Smith through his Dreamers VC,
Intuition Capital, Tiger Global,
The Chainsmokers Mantis VC, and many more.
So what does Public offer?
Well, Public provides commission-free brokerage services
for trading stocks or ETFs in small units called slices.
By slicing stock shares into smaller units,
Public makes them more accessible to more people.
Instead of paying by the share, you pay by the dollar.
Everything is done through the Public mobile app,
which is available for iOS and Android.
Both apps seem to push out updates consistently
and there's always a community of traders,
some of them are subject matter experts.
In the community,
you can follow traders and see the trades they're making.
You can also share different trading and investment ideas.
Public says that it's essentially a social network
for investing.
Moreover, Public curates stocks within themes
to help people discover companies
based on trends and personal interests.
Themes include green power,
which is green energy stocks and ETFs,
self-driving cars,
women in charge, which is female-led companies
and dozens more.
You can also DM or build a group chat with other traders.
There are a lot of chats around specific stocks,
specific industries,
and there are even chats that happen during earnings calls
so investors can trade notes.
This is chat designed for investors
so you can even embed custom charts.
For stocks that pay dividends,
you have the option to reinvest the dividend
back into the stock.
Public does not charge a fee for this service.
If you'd like to reinvest your dividends,
contact Public through the app's chat feature.
They are also one of a growing number of companies
that allow you to invest in fractional shares,
which means that you can get started investing
and price your stocks with less capital upfront.
There are over 5,000 common stocks and ETFs on Public.
OTC, which is over-the-counter stocks, they're not offered.
OTC stocks aren't available
because Public considers them to be too risky.
OTC stocks don't have the same regulatory
or reporting requirements as stocks on larger exchanges,
such as the New York Stock Exchange and Nasdaq.
We also like that Public offers safety labels.
These are labels they will put on certain stocks
that are considered very risky.
There's also no payment for order flow, which is PFOF.
As commission-free trading
has quickly become an industry-wide standard,
brokers have had to find other ways to make money.
Some platforms have chosen to generate income
by routing their trades to specific clearing firms.
This revenue model was referred to
as payment for order flow, which is PFOF.
PFOF has been much maligned by the invest in the industry
as many have said
that leads to conflict of interest for brokerages.
Despite this, it's still the primary revenue generator
for several firms.
However, Public isn't one of them.
It announced on February 16th, 2021
that it was officially a PFOF-free brokerage.
In an effort to replace some of the lost revenue,
Public added an optional tipping feature on trades.
To be clear, Public does not require any of its clients
to leave a tip,
but doing so is one way that clients can show their support
for Public's desire to align their incentives
with their customers.
For those who day trade,
Public may not be the best option.
They allow periodic day trading,
but if it's done all the time,
the trader's account will be restricted.
Accounts that have four or more good faith violations
will be restricted for 90 days by Public's clearing firm,
Apex Clearing.
They also don't offer margin accounts.
If you're looking to trade,
look for an app that specializes in trading like Webull.
We'll have their link in the description.
How about cryptocurrency investing?
Well, Public allows its users to invest
in up to 30 different crypto options,
including Bitcoin, Ethereum, Litecoin, and many more.
New York residents are limited to just seven options,
but that's better than most
since New York is pretty hardcore
when it comes to cryptocurrency regulations.
However, Public does not offer a crypto wallet.
This means you don't actually have control over your crypto
and you can't use it to transact
outside of the public platform.
As such, if you're really interested in investing in crypto,
you should use a real cryptocurrency exchange.
Let's talk about fees with Public.
Public is commission-free,
but there may be small exchange fees incurred for trades.
Additionally, there are fees for various services
like all broker-assisted phone trades, that's 30 bucks,
domestic wire transfer, that's 30 bucks,
domestic overnight cheque, that's 35 bucks,
return cheque, ACH wire or recall stop payments,
that's 30 bucks,
ACAT outgoing, that's 75 bucks,
paper statements are 35 bucks.
Let's talk about how to open an account with Public.
An account can be opened through their mobile app.
You can download the mobile app for iOS or Android
from their website.
We'll have links to Public in our description.
You can also fund the account with an ACH transfer
from your bank.
There is no minimum deposit required.
Cheques can also be mailed in as well.
Note that Public charges $75
to transfer money out of Public to another brokerage.
You may not be able to withdraw money
if funds have not settled from recent trades.
So again, good to know.
Let's talk about how does Public compare in the marketplace?
Well, Public is not the only commission-free
investing app out there,
but they are one of the few options
that allow fractional share investing
and their community features are very different.
However, it has fewer investment options than other brokers
as it does not support mutual funds, options,
or bond trades.
If you're looking for access to more investment options,
check out our video outlining the best free investment apps.
While there are similar
commission-free brokerages available,
most have some social aspect
and the quality of the social component
is one thing that can really set these brokerages apart.
Additionally, you may gravitate to the community
of one brokerage and not the other.
There's a low barrier to entry
to find out if you like Public or not.
App functionality will also play a role in your decision.
So is Public worth trying out?
Well sure.
It could turn out
to be the one commission-free brokerage service
that you like the most
and new clients who are referred by someone else
can receive a free stock or stock slice
worth up to 70 bucks.
So check out that bonus offer
by clicking the link in our description.
Well, what do you think of our Public review?
Is Public something you're interested in trying out?
Please let us know in the comments below.
This is Andy from The College Investor
and we'll see you in the next video.
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