How many of us went back to Robinhood after The Great GameStop Short of 2021? Well, Robinhood ($HOOD) went public and didn’t make as much money on its IPO as anticipated. So, could it be that they are just a little out of touch?
The GameStop controversy
Robinhood has been out of favor with casual investors since it froze buying and selling during a short squeeze of GameStop ($GME) and other meme stocks. Even with the slogan “democratizing finance for all,” many still believe Robinhood proved if their backs are against the wall, they’ll side with the hedge funds—even though CEO Vlad Tenev denied these claims.
Damage control
Since then, Robinhood has been trying to regain all of the users they’ve lost and cover up their bad reputation. This December, Robinhood reached a $65 million settlement for misleading its customers. After explosive popularity growth during the pandemic, people are unsure Robinhood will be able to sustain success long term without the trust of its users.
Robinhood’s IPO price was around $38 per share. That price would value them at $32 billion. There is a demand for commission-free trading platforms now that Millennials and Gen Z have become infatuated with the stock market. But the way Robinhood conducts business has their customers tentative.
Is Robinhood really that bad?
It seems like every move they make, they fall more out of touch with their audience. For example, after people were upset with their position in the GameStop short squeeze, customers complained because they were unable to leave the app. The platform also was sued by Ice Cube for false endorsements because it alluded to his famous lyric “check yo self before you wreck yo self” by saying “correct yourself before you wreck yourself” when referencing stock corrections.
The “thank you” email
Also, we all received this creepy email when Robinhood went public:
It’s the very cool “You did this. We’re here because of what you did” message. They’re writing everyone a thank you letter for totally being on their side this entire time. But unless Robinhood falls back into favor with its audience, I don’t know how long it can sustain its pandemic success.
Still, some people believe Robinhood is not to blame for GameStop-Gate. Check this out.
