On January 28, 2021, Robinhood cut off buying in shares of AMC Entertainment Holdings, Inc., GameStop Corp. and other popular stocks.
This caused the shares to fall, infuriating investors.
Just 3 days before, Robinhood CEO Vlad Tenev and top engineers knew the platform was under incredible stress. From an internal chat:
So, what did they do? Restrict new sign-ups? Pull some ads? No.
In fact, despite being well aware that its systems were buckling under enormous volume, Robinhood barrelled ahead to its biggest day for downloads ever.
That was January 27th. One day later, all hell broke loose.
This is but one gem from a class action lawsuit in the United States District Court for the Southern District of Florida.
As someone who invests in tech startups, I can certainly understand their desire to grow. But when your internal systems are so strained that you can barely service your existing customers, throwing gasoline on the fire isn’t the answer.
This behavior jeopardizes your reputation for the long term in order to reach a short-term goal.
Something tells me this won’t be the last lawsuit.
More on markets:
If you found this post interesting, please share it on Twitter/Reddit/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog!
Save Money on Stuff I Use:
You already shop on Amazon. Why not save $100?
If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.
Best of all: No fee!
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.
The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.
Use this link to save 5%!
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.