Stake Brokerage: A History of Growth and Market Challenges
Founded in Sydney, Stake emerged as a disruptive force in the financial technology landscape, aiming to democratize access to global markets. By leveraging a digital-first approach, the platform sought to remove the traditional barriers that often prevented retail investors from accessing high-value equities.
The Founding and Early Launch
Stake was established in 2016 by Dan Silver and Matt Leibowitz, the latter of whom brought experience from the market-making firm Optiver. The company officially launched its online brokerage platform in August 2017, gaining immediate attention by offering $0 brokerage fees on trades executed on Wall Street.
Market Volatility and the GameStop Crisis
In January 2021, Stake faced significant operational hurdles during the GameStop short squeeze—a period of extreme volatility where retail investors drove up the price of GameStop ($GME) shares. This surge led to service outages on the Stake platform, which caused cancelled open market orders and delays in fund transfers.
The situation intensified when DriveWealth, the broker-dealer Stake utilized for U.S. equities, substantially increased the capital requirements necessary to purchase $GME shares. Consequently, Stake was forced to halt trading for GameStop. This decision sparked online criticism, particularly regarding Payment for Order Flow (PFOF)—a practice where brokers are paid by market makers to route trades through them. While Stake addressed these concerns in a blog post (which was later deleted), the company denied participating in PFOF routing.
Expansion into Australian Markets and Superannuation
Following the volatility of early 2021, Stake expanded its service offerings to better serve the Australian market. The company introduced CHESS-sponsored trading for the Australian Securities Exchange (ASX). CHESS (Clearing House Electronic Subregister System) is the official registry of shareholders for companies listed on the ASX, providing investors with direct legal ownership of their shares.
Additionally, the company launched Stake Super. This service provides a full-service administration solution for Australians wishing to manage their own superannuation—the compulsory pension system in Australia—via a Self-Managed Super Fund (SMSF).
Key Facts
- Founded: 2016 in Sydney by Matt Leibowitz and Dan Silver.
- Launch Date: August 2017.
- Core Offering: $0 brokerage on Wall Street trades.
- ASX Integration: Offers CHESS-sponsored trading.
- Retirement Services: Provides SMSF administration through Stake Super.
- U.S. Partner: Utilizes DriveWealth as its broker-dealer for U.S. equities.
| Category | Details |
|---|---|
| Founders | Matt Leibowitz & Dan Silver |
| Headquarters | Sydney, Australia |
| Primary Markets | Wall Street (USA) and ASX (Australia) |
| Specialized Services | SMSF Administration (Stake Super) |
Frequently Asked Questions
Who founded Stake and when?
Stake was founded in 2016 in Sydney by Matt Leibowitz, formerly of Optiver, and Dan Silver.
What happened to Stake during the GameStop short squeeze?
Stake experienced service outages that delayed fund transfers and cancelled orders. Additionally, they had to halt trading in GameStop after their broker-dealer, DriveWealth, raised capital requirements for the stock.
What is CHESS-sponsored trading?
CHESS-sponsored trading allows investors to have their shares registered directly in their own name on the Clearing House Electronic Subregister System, rather than through a custodian.
What is Stake Super?
Stake Super is a full-service administration solution designed for Australians who want to invest their superannuation through a Self-Managed Super Fund (SMSF).
Did Stake use Payment for Order Flow (PFOF)?
Stake denied taking part in PFOF routing in a blog post that was subsequently deleted from their site.