Stocks app Robinhood goes down again, and people are not happy (2024)

FAQs

Why don't people like the Robinhood app? ›

Robinhood is a good platform for active trading and provides commission-free trades on all investments. But it's lacking in some areas, such as the number of accounts it offers and the fact it doesn't let you invest in certain popular asset classes such as bonds and mutual funds.

Key Takeaways. Robinhood shares tumbled as the online brokerage missed analysts' estimates and warned about current quarter revenue.

For instance, Robinhood is a very sleek and minimal application, and investor tools are rudimentary compared with those of other major brokerages like Charles Schwab and E*Trade. This can lead to hasty and uninformed decision-making, especially for novice investors.

Robinhood was accused of concealing how its business relied heavily on "payment for order flow," with the Menlo Park, California-based company collecting "unusually high" fees from outside broker-dealers who processed customer trades.

The company's growth rates are stabilizing on a sequential basis as it reins in its spending. The stock could recover quickly as retail investors rotate back into the market.

Shares of Robinhood fell Wednesday after the retail brokerage reported a drop in trading volumes in the last quarter and said it's looking to expand growth in Europe. Robinhood also reported fewer monthly active users, which fell 16% to 10.3 million in the third quarter from the same period last year.

Robinhood's cost cuts are also bearing fruit. The company slashed jobs throughout 2022 and 2023 in the wake of its shrinking user base, and although it still lost money in 2023 as a whole, it did deliver two profitable quarters (Q2 and Q4).

Some critics do say that Robinhood makes investing too easy. This might encourage investors to spend money without doing sufficient research, which in itself can be risky.

Should I worry about my money in Robinhood? ›

Your securities and cash are protected by SIPC

Robinhood Financial LLC and Robinhood Securities, LLC are both members of SIPC, which protects securities for customers of its members up to $500,000 (including $250,000 for claims for cash) for each investing account, including IRAs.

In addition, prior to March 2021, there were deficiencies at Robinhood in its review and approval process for options and margin accounts, weaknesses in the firm's monitoring and reporting tools, and insufficient customer service and escalation protocols that in some cases left Robinhood users unable to process trades ...

Robin Hood probably became an outlaw by killing a deer on a wager. Then he had slain one of the king's foresters who threatened his life. A price was set on Robin's head, and he went into hiding. Soon there gathered about him other bold men who had been outlawed or deprived of their inheritances.

Vlad Tenev

In 2013, Mr. Tenev co-founded Robinhood with Mr. Bhatt to democratize finance.

Robin Hood was a hero in his time. While many believe he was a thief and a villain to the law, others feel he was a hero to the poor. Some people might say that Robin Hood stole from the government, and stealing is a crime, no matter what your cause is.

People might prefer Robinhood over other free investing apps like Stash and Acorns for reasons such as its user-friendly interface, commission-free trades, a wide range of tradable assets, and the ability to buy fractional shares.

We'll generally decline transactions that make you go negative if you don't have enough available cash, including any available margin credit, to cover it. We don't charge you anything for getting declined for insufficient funds.