Robinhood made waves as a leading company in a new generation of technology companies aiming to change the way people save, invest and, yes, speculate with their money.
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Today, though, it’s making waves for different reasons. Stock markets around the world roil and churn as investors grapple with the implications of a particularly virulent and aggressive respiratory virus formally known as SARS-CoV-2, which originated in China but is now rippling across the planet.
This is the sort of moment some risk-loving swing traders live for, the sort of moment others dread, the sort of moment where some people want to watch their stocks and make some money moves. On Monday, according to CNBC, 10.8 billion shares traded hands, 50 percent higher than the 50-day moving average.
None of those shares were traded on Robinhood, because Robinhood has been in the midst of a prolonged service outage that stretched into a second day.
On Tuesday morning, Robinhood’s status page stated that it was experiencing a system-wide outage affecting all facets of its service except for market data and dividends. During this time, I attempted to sign up for a Robinhood account for testing purposes. I succeeded in entering my information and creating the account, but was faced with a series of error messages when I tried to hook up my bank account and perform other functions on the company’s mobile application.
As of about 11 AM Central Time on Tuesday, Robinhood’s status page indicates that all systems are operational with the exception of its email support system, which had been experiencing reliability issues since Monday morning.
The company said it will work with customers “on a case-by-case basis” and possibly offer compensation or other forms of restitution to people whose trading accounts were affected by the company’s system outage.
Robinhood was one of several companies rumored to seek IPOs in 2020. With the reputational damage and the as-yet unknown costs stemming from its early March outage, its path to public markets now looks decidedly more uphill.
Robinhood was valued at $7.6 billion in its Series E round, which netted the company $373 million over two tranches. Crunchbase News covered the first $323 million close in late July 2019, and the company secured an additional $50 million to extend its Series E round at the end of October 2019.
Illustration: Li-Anne Dias