Definitely the worst timing possible. As stocks receded last week and now are bouncing back today, many investors will want to get back and take out positions to either reclaim some losses or just catch the upside.
But if you weren't in at the opening bell or there about those profits are gone.
Of course with any platform like this they do not hold liability for the inability to perform orders as that will be stipulated in their TOS but it will certainly lead to a considerable amount of churn.
There are industries where you can have an outage and it won't ruin your business. Certainly Twitter had it's fair share and was able to get past them over time, but having an entertainment or news source go down isn't the same as a service which is dealing with your money.
A single outage at the wrong moment is enough to create enough of a reason for customers to lose all trust and immediately leave. And the timing of the issue couldn't have been worse.
Whether it was an update to the app from last week, or simply a surge in trading activity that led to the issue is unknown but certainly the impact of this will likely be felt for the next couple of weeks as customers decide whether or not to stick with the platform. But breaking trust in the fintech sector happens quickly and it's hard to retrace.
> A single outage at the wrong moment is enough to create enough of a reason for customers to lose all trust and immediately leave
I really wonder how bad the impact will actually be, since I would think the set of people losing trust and leaving because of this to be very close to that of people who would lose trust and leave because of RH making hundreds of millions from selling their trade data to HFT companies (hmm, why would the data be that valuable? What do the buyers of the data have to gain?).
Full email that just went out to perhaps all accounts. I have never done a trade, but I do have one stock in my portfolio. The free share I received at sign up.
"This morning, starting at 9:33 AM ET, we started experiencing downtime across our platform. These issues are affecting functionality on Robinhood, including your ability to trade.
All of us at Robinhood are working as hard as we can to resume service, and we’ll update you as soon as the issue is resolved. We understand the impact this is having and we apologize for any trouble this has caused.
Please check our status page at status.robinhood.com. Thank you for being a Robinhood customer."
Just for a time reference, the issue started at 9:33AM ET - and I received that email around 2:45PM ET - so basically the entire trading day.
They also basically spoiled the app last week with the new "custom lists" feature. Instead of a quick glance at watched stocks you now see a bunch of pluses with list names, that you have to expand and then scroll.
But if you weren't in at the opening bell or there about those profits are gone.
Of course with any platform like this they do not hold liability for the inability to perform orders as that will be stipulated in their TOS but it will certainly lead to a considerable amount of churn.
There are industries where you can have an outage and it won't ruin your business. Certainly Twitter had it's fair share and was able to get past them over time, but having an entertainment or news source go down isn't the same as a service which is dealing with your money.
A single outage at the wrong moment is enough to create enough of a reason for customers to lose all trust and immediately leave. And the timing of the issue couldn't have been worse.
Whether it was an update to the app from last week, or simply a surge in trading activity that led to the issue is unknown but certainly the impact of this will likely be felt for the next couple of weeks as customers decide whether or not to stick with the platform. But breaking trust in the fintech sector happens quickly and it's hard to retrace.