Many people are very upset with Robinhood today. Between the barrage of deleted negative comments on the Play Store list of apps and an absolute audience at the congress, the company behind the popular stock trading service is in a tough spot, and customers looking to join the meme train / r / WallStreetBets must operate under strict limits if they are to do so through Robinhood. So, if you were among the stock market participants (or just someone hoping for an improvement at high tide), did you give up on the app and switch to another one?
The full story of the events of the past few weeks is likely to be the subject of entire chapters in the economics books when things finally work out. But the short version is that some people on Reddit decided to pull a “short squeeze” on a stock (GameStop) that hedge funds and institutional investors pumped tons of money into to fall. It is a very difficult thing to do, and they did it, forcing the action to go off in the process, with their enthusiasm spreading through several other actions as well.
Last week, close to the peak of this high, Robinhood’s stock trading app blocked the trading of these shares. At the time, a detailed explanation was not available, but the company has since claimed that it was due to a change in deposit requirement increases – as in, the company literally did not have enough money in the right places to satisfy the required amounts being generated. Whatever the cause, the final effect is now clear: customers are upset.
Many have threatened to switch to another trading service now that Robinhood’s influence has made other applications and services equally low or zero-rate. However, Robinhood’s “fractional” trading is not yet widespread and some other brokers have imposed similar restrictions on trading.
Are you among those who are doing Robinhood’s exodus? If so, feel free to collaborate with any app or service you’ve moved to and liked.
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