By John McCrank and C Nivedita
(Reuters) – Robinhood Markets Inc, the fintech startup that introduced millions of millennials to equities, options and crypto trading, greets visitors to its website with the motto, “It’s Time to Do Money.”
But on Monday, many of the firm’s 10 million users found it difficult to “Do Money” in a timely way after the third outage of Robinhood’s trading platform in a week amid an extended spike in market volatility over coronavirus concerns.
“So much for trying to invest for the first time. Thanks for ruining my taste of it lol,” said one user on Robinhood’s Twitter help feed.
The Menlo Park, California-based company said on its website that trading was “functional for new orders with the exception of fractional equities since at least 10:25 AM ET.” But many users took to social media to complain that they were still not getting confirmations for earlier sell and cancel orders.
A spokeswoman for the firm said buy and sell orders placed after service was restored were functioning.
The latest outage came as Wall Street’s main indexes dropped 7% just after market open, triggering a 15-minute market-wide trading halt, and the Dow Jones Industrial Average recorded its biggest intraday fall ever.
Robinhood faced similar glitches last Monday and Tuesday while markets whipsawed as traders adjusted positions in response to the fast-spreading coronavirus.
Last Monday’s outage came as Wall Street surged, with the Dow rising over 5%, as it retraced some of the prior week’s sharp coronavirus-inspired sell-off.
Robinhood later said it fixed the issue, but the following morning, as stock prices tumbled despite a half-a-percentage point interest rate cut by the U.S. Federal Reserve, Robinhood again said its trading app had technical issues.
A Florida-based client of Robinhood on Wednesday launched a lawsuit on behalf of himself and others affected by the outages.
A Twitter account with the user name Robinhood Class Action now has more than 7,650 followers.
Robinhood was founded in 2013 and quickly became popular among young investors with its free trading app.
Last fall, incumbent retail brokers, such as Charles Schwab Corp, TD Ameritrade Holding Corp, and Fidelity Investments eliminated their stock trading commissions in a bid to compete with newer, more nimble rivals such as Robinhood.
Robinhood said last week it was notifying customers on how to discuss possible compensation for being unable to trade on the app.
(Reporting by John McCrank in New York and C Nivedita in Bengaluru; additional reporting by Anna Irrera; Editing by Ramakrishnan M. and Dan Grebler)
