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Robinhood CEO endorses real-time settlement



CNBC’s Kate Rooney reports on the latest response from Robinhood after last week’s Reddit-fueled market volatility. She also reports on their biggest ad campaign yet. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Robinhood, which has found itself in the center of controversy after restricting trading on equities including GameStop, will run its first Super Bowl ad.

The ad, which will kick off what the company says is its largest ever brand campaign, features the message: “You don’t need to become an investor. You were born one.” The company said the ad for Sunday’s game is meant to highlight people of all backgrounds investing “time in themselves and in the people and things that they love,” whether it’s starting businesses or changing their hair color.

The stock trading app has faced a public relations crisis as angry customers hit back at restrictions imposed last week on trading of some high volatility stocks.

A Robinhood user filed a class-action lawsuit Thursday, and by Friday afternoon, thousands of investors were using an online service called DoNotPay.com to automatically join the suit. The suit alleged that Robinhood limited the trading of video game retailer GameStop shares “purposefully and knowingly to manipulate the market.” Robinhood on Tuesday rolled back more of its trading limitations, allowing clients to buy up to 100 shares of GameStop.

Robinhood has denied those claims, and pointed to an increase in capital requirements from the Depository Trust & Clearing Corporation due to the retail investing frenzy in heavily shorted names like GameStop and AMC Entertainment.

“To put it in perspective, this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten-fold. And that’s what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on,” the company said in a blog post Friday.

The app seems to be benefiting despite the uproar: Robinhood led the industry in app downloads last week by a wide margin, according to JMP Securities’ analysis using SimilarWeb app data. The app saw more than 600,000 downloads on Friday, compared with 140,000 on its best day in March during the pandemic market rout in 2020. Robinhood also raised another $3.4 billion from investors in the past two weeks to support its record customer growth, the company said Monday.

The Super Bowl spot doesn’t reference the recent events. Asked how Robinhood planned to address customer claims that the company had broken its brand mission “to democratize finance for all” and how the Super Bowl ad fits into how Robinhood is communicating with customers, chief marketing officer Christina Smedley said the company is seeing customers joining the app and wanting to know more about it.

“It felt like this was a great stage for us to remind people about what we stand for and remind people about why the company was put into existence in the first place,” she said.

The company worked with agency MediaMonks and director Nina Meredith on the ad.

2020 was a huge year for retail investing, with major online brokers including Charles Schwab, TD Ameritrade, E-Trade and Robinhood seeing new accounts and trading activity surge. Smedley said the app is meant to reflect stories that customers have shared, whether it’s buying shares when they’re on a run or working a second job.

“We sort of created and crafted that narrative around stories that customers have told us,” she said. “We saw, throughout the whole of 2020, more people coming onto our platform.” She said customers have embraced offerings like the ability to buy fractional shares on Robinhood.

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47 Comments

  1. The only thing idiotic about most of the GME buyers for tryna be using Robinhood is that they too traded with money that doesnt belong to them by (Buying Options with Margin and Exercising it to bypass the amount purchasing restriction system) as shared by Redditors. They think the money comes from the sky. Robinhood is also a big liar because they have (Their Own Clearing House) in which they can set the requirement to screw the F2P traders. If you're an experienced player, you should already know that being F2P players; the game system is always set by developers to go against you so you must buy premium content to accelerate ahead or suffer grinding. Now look at the steam dying down. The anger and outrage doesnt last long enough. The so called "revenge" is just feint.

  2. We are protecting retail investors by stopping people buying the 140% shortage security thus price falling and screwing the retail investors while the hedge fun can cover their shorts at a low price. Robinhood

  3. lmfao!!! No. Their company is dead. No one will ever trust or use them again.

  4. Nothing that Robinhood is saying makes sense. The most probable reason is that they are lying. Highly doubt that they got into financial trouble over GME.

  5. Was it just robinhood that was stopping the buy or it was a bunch of platforms altogether?

  6. Yeah— move all your money to fidelity / ANY OTHER but do your own research. RH is trash

  7. Propaganda for the elite…as usual…if it was fair they would have frozen trading for everyone period…but citadel is their BIGGEST client and THEY were bleeding money….no mention of that becuase you're spewing propaganda garbage

  8. They are all buying Ideanomics Stock (IDEX) You guys are welcome! Go make money!!!!!!!

  9. i told these idiots rh would still be here. its too easy to use compared to anything else. the idiot buying gamestop at 483 thinking hes sticking it to wall st is not going to think or swim. if so, hes going to have a bad day trying to figure it out. ppl should be thankful rh opened up the markets to the little guy. any brokerage with rh customer base would have had some trouble over the past week

  10. The truth is that after this AMC and GME is done with. All real traders and investors will leave robin-hood for good.

    I cant trust them anymore and will never do business with them after this month

  11. Why don’t you ask 100% cash instead of just barring any buy order? Why did you allow sell? Who was buying? Keep fooling the customers, you will lose your underware!

  12. I’m going to stop talking smack and actually see how I can transfer my funds out of Robin-Hoods. Any suggestions where else I can buy fraction stocks.

  13. I lost because of you Robinhood. Thank you for letting me lose my hard earned cash!

  14. In your face outright thievery and corruption. And your bank knows all about it. Can we confidently say collusion?

  15. I can’t imagine a person that’s heard any news this past week thinking, “yeah, I’m gonna try that Robinhood brokerage. They seem honest”

  16. I think it makes sense, considering there are a lot of users now that want real time settlement.. imagine not having that you would lose money waiting for your sell to go through.. idc about GME, There are more opportunities to come you just have to look for it..

  17. *Hedge funds get cornered and squeezed.
    Hedge Funds: Hey DTCC, can you ask more money from the little brokers.
    DTCC: Sure friends, I'm on it.
    Robinhood: Due to margin requirements we will not be allowing people to buy meme stocks.
    Hedge Funds: * Evil laugh *

  18. Real Time Settlement? O, you mean blockchain. Yes Vlad, that Would revolutionize Robinhood and bring back the customers that have left during the current exodus. Otherwise it’ll just be same old Robinhood.

  19. I had initiated a full transfer from my robinhood account into my webull account. Webull sent me a message of rejected due to a missed cutoff. At the same time my robinhood account was deactivated. Why was my account deactivated? How can I get my account activated again? It’s very concerning because my stocks are in a downtrend and I can’t do anything to stop this. I hope robinhood has better customer support and faster response in the near future. Please I need this issue resolved ASAP as my stocks are going down. How can I reactive my robinhood account?

  20. Too late budday!!!!… lol you should have came up with that excuse before-hand!!! Lolol

  21. We're sorry. We didn't mean it. We're sorry we didn't mean to DP America

  22. They still have not givin me my 600$ they stole and still have not reached out to me or responded to my many emails.

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