TipRanks CEO Uri Gruenbaum wants to make investing easier for “average joe” investors. He joined TheStreet to explain how his company works and how using “alternative data” can make decision making a little easier.
Transcript:
Conway Gittens: So tell us, what does TipRanks do and how do you help everyday investors?
Uri Gruenbaum: So we like to think of ourselves as a Bloomberg for the average Joe. And basically what we do is we collect a lot of data, alternative data, which I can soon explain a bit more. And we allow the average investor to make data driven investment decisions. When we started the company 12 years ago, our main goal was to bring transparency by measuring the performance of anyone giving investment advice. So up until 12 years ago you’d see all these analyst recommendations, finfluencers all those bloggers recommending to others what to buy or sell. We would collect that data and start measuring. Who knows what they’re talking about and who doesn’t? It is called a financial accountability engine, and that was extremely successful. And we leveraged that success to add more and more and more unique data sets, news, research and tools for investors.
Conway Gittens: So tell me about this alternative data and how the data helps investors make decisions?
Uri Gruenbaum: Great so. So what is the alternative data? So let’s start with what is not alternative data. Anything that a company discloses their earnings, a company, announcements, all of that, all of that information, that is basically fundamental data that public companies provide. However, in the last 20 years, there has been a growing trend of alternative data. And so what is that? If you’re an investor and let’s say you want you’re considering to invest in Netflix, one thing you can do is you can read the Netflix earnings reports and say “OK, now they just grew their subscriptions by 15%. This is a strong conviction and I’m going to buy the stock.” But a smart investor or an institutional investor, they wouldn’t necessarily wait for the investment reports. They would look for clues from the outside that would already tell them what Netflix report. Now, one example would be, for instance, to see how many visitors did netflix.com receive in the last month. If you can track how many visitors came to Netflix or how many people installed their app, you can guess how many new subscribers have joined. And so there are a lot of different signals that can be satellite images – it can be user trends, it can be geolocation tracking, it can be credit card processing. For instance, if you know how many people, if you buy data from, let’s say, a credit card company of how many people have paid for Netflix, you can estimate what their earnings would look like. So there is a long list of alternative data that institutional investors are able to monetize very well, but that are not accessible to retail investors. We feel that our mission at TipRanks is to empower the retail investor to level the playing field. And so that’s what we’re doing. We’re bringing all these unique data sets on top of the standard ones and making them available for free for the average Joe.
