Robinhood suffers online outage as market advances

Robinhood suffers online outage as market advances

As U.S. stocks headed for their first gain in eight sessions, the online brokerage had technical issues

Robinhood Markets Inc. customers experienced technical issues on the company’s online service when U.S. markets opened on Monday morning and the outage lasted the entire U.S. trading day, preventing customers from making trades as stocks surged after last week’s rout.

The systemwide issue began as the markets opened, with clients unable to access their accounts. Almost two hours later, Robinhood Markets Inc. said the problem had been identified and its staff was working on a fix. By 4 p.m. in New York, access had not been restored.

Clients blasted the closely held company on social media for not being able to make trades.

“One of the most anticipated trading days and your service is down at market open,” one user wrote. Another user said: “What is going on — I can’t do any trades — you will lose me as customer going forward. This ridiculous.”

Downdetector, a website that tracks real-time outages online, reported the issue at the market open.

The failure was a setback for a Silicon Valley startup that has sought to lure young, tech-savvy investors who want to trade entirely online. Founded in 2013, the Menlo Park, Calif., company made a name for itself by offering commission-free trading on a mobile app. Since then, it has garnered millions of customers and a valuation of $7.6 billion.

Financial technology companies may have difficulty dealing with higher trading volume in more volatile markets, said Craig Pirrong, professor of finance at the University of Houston. “Particularly, is the technology scalable enough to handle the amount of orders they’re getting?” he said.

Recently, much larger competitors including Charles Schwab Corp. and Fidelity Investments have dropped some trading fees, essentially matching Robinhood’s offering. Companies including Jack Dorsey’s Square Inc. have also started offering the ability to trade stocks for free.

U.S. stocks surged the most in 14 months Monday as investors gained confidence that central banks would intervene to mitigate the economic impact of the coronavirus. Last week, the S&P 500 Index suffered its worst week since 2008.

During the market decline, Fidelity and Schwab customers experienced technical issues that were quickly repaired.

[More: Vanguard, TD Ameritrade latest digital services to struggle with market downturn]

Recent Articles by Author

Amid bubble fears, investors keep buying

Amid bubble fears, investors keep buying

Despite warnings of market excess, exchange-traded U.S. equity funds took in $7 billion last week, while the S&P 500 saw its best week since November.

Morgan Stanley’s Gorman now best-paid bank CEO, topping Dimon

Morgan Stanley’s Gorman now best-paid bank CEO, topping Dimon

Morgan Stanley boosted its chief executive’s pay 22% to $33 million for 2020, when the Wall Street bank posted its third consecutive year of record earnings and announced two large deals.

Day traders turning to advisers for help

Day traders turning to advisers for help

Do-it-yourself investors found that market gyrations required constant attention and that their amateur trading tools were limited, so many have decided that they need professional help.

Wall Street skimps on compensation despite pandemic windfall

Wall Street skimps on compensation despite pandemic windfall

Investment banks saw a rise in revenue per employee last year, but that doesn't seem to have translated into big rewards for workers.

Bitcoin’s worst week since March rattles faith in crypto

Bitcoin’s worst week since March rattles faith in crypto

Prices for the digital asset have tumbled 14% this week, marking the steepest decline since March, with Bitcoin near $31,000 Friday. Commentators have cautioned that a sustained drop below $30,000 could presage further losses.

X
X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print