How Robinhood Convinced Millennials to Trade Their Way Through a Pandemic
The $8.3 billion stock trading startup fumbled into the financial crisis — and is now winning it
If there was a day everything changed for stock traders, it was Monday, March 2. The prior week, a Centers for Disease Control official warned that as the coronavirus pandemic sweeping Asia and Europe spread in the U.S., “disruption to everyday life may be severe.” China reported 202 new Covid-19 cases, bringing the total there to more than 80,000 despite massive lockdowns. Hundreds of new cases were confirmed in Italy; deaths were reported from Australia to South Korea; and cases in the U.S. tipped past 100. The S&P 500 had fallen for five straight days, plunging nearly 10% on spiking volume. For anyone working the markets, this would be the day to be ready for action.
Yet somehow it was a disastrous day for Robinhood. The markets rallied, but Robinhood — the no-fee trading app known for its young user base and unicorn-level valuation — did not. The service suffered an outage that lasted not an hour, not a couple of hours, but the entire trading day. “I definitely won’t be using Robinhood anymore,” one among many outraged users vowed to CNBC. “When they reopen I’m moving all of my funds.” Others even sued. For a company that just weeks…
