A whole lot of folks are pretty upset at Robinhood these days. Between the flood of since-deleted negative reviews on the Play Store app listing to an outright congressional hearing, the company behind the popular stock trading service is in a tight spot, and customers hoping to join the /r/WallStreetBets meme train have to operate under strict limits if they want to do it via Robinhood. So, if you were among the stock-trading memers (or just someone hoping for a lift on the rising tide), have you given up the app and switched to something else?
The full history of the events of the last couple of weeks will likely be the subject of entire chapters in economic textbooks once things finally resolve. But the abridged version is that some folks on Reddit decided to pull a “short squeeze” on a stock (GameStop) that hedge funds and institutional investors had pumped tons of cash into falling. It’s a very difficult thing to pull off, and they did it, forcing the stock to skyrocket in the process, with their enthusiasm bleeding over into several other stocks as well.
Last week, near the peak of this rise, the stock-trading app Robinhood locked down trading for those stocks. At the time, a detailed explanation wasn’t forthcoming, but the company has since claimed it was due to a change in deposit requirement increases — as in, the company literally didn’t have enough cash in the right places to satisfy the required values being generated. Whatever the cause, the ultimate effect is now clear: Customers are pissed.
Many have threatened to switch to another trading service now that the influence of Robinhood has made other apps and services similarly low or zero fee. However, Robinhood’s “fractional” trading still isn’t too widespread, and some other brokerages have imposed similar restrictions on trading.
Are you among those making the Robinhood exodus? If so, feel free to chime in with whichever app or service you’ve switched to and how well you like it.
