Robinhood crashed again just as demand for newly split Apple and Tesla stock was heating up
Many people trading commission-free stocks via Robinhood were unable to access the app today because of an outage that lasted several hours. At the peak around 9:30 a.m., Downdetector had logged over 2,400 incidences, with the majority listed as server issues. The company reports that issues have now been resolved.
Normally, this might not have been such a huge deal in August, which can be a slow month for stock trading. But traders were revving their engines for the morning of August 31, as there were two factors set to impact portfolios. Both Apple’s and Tesla’s previously announced stock splits were effective as of the opening bell, and the Dow Jones Industrial Average was set to rebalance stocks making up the 30-firm index of major U.S. companies. The three-hour outage impacted some user’s portfolios as much as 25%.
This isn’t the first time Robinhood’s app has experienced issues during high-volume volatile trading. The month of March had 21 days of outages—one lasting more than a day—according to Downdetector, which coincided with an early period during the coronavirus pandemic when the market was reeling. Each month since then, the app has logged multiple issues.
Complaints about Robinhood to U.S. consumer protection agencies have far exceeded those of its competitors, according to Bloomberg. Among those cited: “This company’s negligence cost me $6,000,” and “I can’t make trades, can’t take my own money and can’t leave their service.”
Robinhood’s management of its March outage is said to be under investigation by both the Securities and Exchange Commission and the Financial Industry Regulatory Authority, according to the same Bloomberg report. Robinhood’s spokesperson said the company is addressing the issues by hiring more customer service reps and improving the platform. Some customers were given compensation, the company’s spokesperson confirmed.
Robinhood wasn’t the only app down today. TD Ameritrade also experienced an outage, which was resolved before noon.