This past week could have just been one of the worst weeks in Robinhood’s 8-year history, however, it also might have been one of the best in some ways.
According to estimates, the private firm’s app was downloaded over 1 million times from this past Wednesday to Friday even though the company banned or restricted the purchase of several different stocks, and users complained about these issues via social media channels. The dramatic increase in new Robinhood accounts has come as the market experienced a significant surge in retail trading of stocks such as GameStop (GME) and AMC Entertainment Holdings (AMC).
According to a blog post published by Barron’s, it should be noted that the app downloads are not really the same as creating new accounts, so the figure (total downloads) is probably just a partial snapshot of Robinhood’s success this past week.
But these numbers for Robinhood still seem surprising because the broker has been facing a lot of stress from relatively poor public perception, especially this last week. Robinhood had also been forced to tap its credit lines and acquired $1 billion from existing investors while addressing rumors that its move to restrict trading of GameStop and various other stocks was in some way nefarious.
Representative Alexandria Ocasio-Cortez (D-N.Y.) and other policymakers noted via Twitter that the US Congress must closely examine Robinhood’s recent actions and platform activity. The company confirmed on Monday that it had secured an additional $2.4 billion from its investors, and has now secured a total of $3.4 billion.
Robinhood’s latest investment round was led by Ribbit Capital, with contributions from current investors such as Andreessen Horowitz, Iconiq, Index Ventures, NEA, and Sequoia.
Robinhood’s management noted that the recent limits set on certain trades were based on demands from the platform’s clearinghouse that it provided more collateral based on the volume of trading being carried out via its system. The firm’s deposit requirements surged to around 10x the average number, according to Robinhood.
JMP securities analyst Devin Ryan noted on Monday that Robinhood app may have been downloaded approximately 550,000 times on Wednesday and more than 600,000 times on Thursday. On Friday, the app was downloaded around 300,000 times.
Ryan had reportedly been looking at data from SimilarWeb, which analyzes Internet traffic. Calculations in the report suggest that Robinhood’s app had been downloaded over 3 million times last month, which is most probably a record for any broker ever. Charles Schwab (SCHW), one of the largest brokers, added around 3 million total new accounts last year after backing out its acquisitions TD Ameritrade and part of USAA’s operations as well.
Robinhood’s best-performing day in March 2020, which came as a result of a boom in trading at the beginning of the COVID-19 pandemic, was just 140,000 downloads, Ryan revealed. Robinhood hasn’t shared its most recent customer count since the past few months, after claiming it had around 13 million account-holders in May of last year.
Ryan says Robinhood app download numbers are “tremendous,” while adding that it indicates that the broker “experienced record growth during some of the most challenging days operationally this past week.” Other companies reported similar levels of interest, with broker Webull and cryptocurrency-focused trading platform Coinbase also recording dramatic growth.
A Robinhood representative told Barron’s that the JMP report has done a “great job explaining this past weekend/week,” but the firm did not confirm whether the estimated app download numbers were accurate.
The Similarweb data isn’t really a net number, which means it won’t account for Robinhood clients leaving the trading platform. Given the firm’s recent challenges and the #BoycottRobinhood hashtag trending on social media, it’s quite possible that the firm lost many clients.