It was lights out again at Robinhood on Monday. For the second Monday in a row, and the third time in a week, the millennial-friendly stock trading app went down as the markets swooned over coronavirus fears.
Robinhood hasn’t yet said what the exact issue is this time around. But for the previous outages, it blamed high trading volumes that pushed its infrastructure to a breaking point. In the aftermath, the company’s founders warned of potential “additional brief outages,” noting that its engineers were now in a better position to resolve them quickly.
Robinhood has attracted millions of users, raised nearly $1 billion, and was most recently valued at $7.6 billion. For many users, the outages in the midst of a crisis force a critical question: How much of your financial life are you willing to entrust to a startup?
Jake Baumann, a Robinhood customer in Argyle, Texas, says he’s a big fan of the company’s accessible, no-fee trading. But he says the outage prevented him from exercising “put” contracts on Amazon stock Monday morning, costing him $15,000. That’s made him question his loyalty.
Baumann says his trades weren’t affected by the outages last week, and he had been satisfied by reassurances that the company was working on the technical problems. But now he’s reconsidering using the platform, wondering whether his trades were too large, given the risks. He says the answer may depend on what kind of compensation he’s offered for the trade that he could not ex
