The GameStop Corp. website. on a laptop and the Robinhood app on a smartphone.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Robinhood, who found himself at the center of the controversy after restricting stock trading, including GameStop, will make his first Super Bowl ad.
The announcement, which will start what the company says is the biggest brand campaign in its history, carries the message: “You don’t have to become an investor. You were born one.” The company said Sunday’s game announcement aims to highlight people from all backgrounds who invest “time in themselves and the people and things they love”, whether starting a business or changing their hair color.
The stock trading app faced a public relations crisis with customers furious against restrictions imposed last week on trading some highly volatile stocks.
A Robinhood user filed a class action on Thursday and, on Friday afternoon, thousands of investors were using an online service called DoNotPay.com to automatically join the process. The lawsuit alleged that Robinhood limited the trading of shares in the video game retailer GameStop “on purpose and consciously to manipulate the market”. Robinhood on Tuesday further eased its trading limitations, allowing customers to buy up to 100 GameStop shares.
Robinhood denied these allegations and pointed to an increase in capital requirements for Depository Trust & Clearing Corporation due to the frenzy of retail investments in heavily sold names like GameStop and AMC Entertainment.
“To put into perspective, just this week, our mandate deposit clearinghouse requirements related to shares have increased tenfold. And that’s why we’ve placed temporary purchase restrictions on a small number of securities that clearinghouses have increased deposits, “the company said in a blog on Friday.
The app appears to be benefiting, despite the uproar: Robinhood led the industry in app downloads last week by a wide margin, according to analysis by JMP Securities using data from SimilarWeb applications. The app had more than 600,000 downloads on Friday, compared to 140,000 on its best day in March during the pandemic market crisis in 2020. Robinhood also raised another $ 3.4 billion from investors in the past two weeks to support his record customer growth, the company said. Monday.
The Super Bowl announcement makes no reference to recent events. Asked how Robinhood planned to address customer complaints that the company had broken its brand mission “to democratize finance for all” and how the Super Bowl ad fits into the way Robinhood is communicating with customers, marketing director Christina Smedley said the company is seeing customers joining the app and wants to know more about it.
“It looked like this was a great time to remind people about what we stand for and why the company was created in the first place,” she said.
The company worked with MediaMonks and director Nina Meredith on the ad.
2020 was a great year for retail investment, with leading online brokers, including Charles Schwab, TD Ameritrade, E-Trade and Robinhood, seeing new accounts and increased trading activity. Smedley said the app was created to reflect stories that customers shared, whether it be buying stocks during a race or working on a second job.
“We kind of created and elaborated this narrative around stories that customers told us,” she said. “We saw, throughout the year 2020, more people joining our platform”. She said customers have embraced offers like the ability to buy fractional shares at Robinhood.
Robinhood declined to comment on how the company plans to secure existing customers and rebuild trust, or how it will handle any additional volume of customers that a Super Bowl ad might bring, but pointed to recent company blog posts. Among them was a post on Tuesday about the two-day settlement period. The post said the period “exposes investors and the industry to unnecessary risk and is ready for change”.
Robinhood this week also published a post promoted on Twitter saying, “We want to share with you what Robinhood believes and represents. Here is the full story of our CEO, Vlad,” with a link to an opinion piece by Vlad on USA Today Tenev . Many customers were responding to the tweet with negative memes or screenshots of their problems.
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