Trading app tries to fix a 'rigged' financial system
New York (CNN Business)Robinhood’s founders explained what caused two app outages within 24 hours during one of the stock markets’ wildest swings.
People were unable to access the free stock-trading app Monday, when the Dow logged its biggest point gain in history. Again, on Tuesday, the app crashed for a brief time — after Robinhood said it had fixed the issue.
The app appears to be working on Wednesday, in what could be another big day for Wall Street.
Cofounders and co-CEOs Baiju Bhatt and Vlad Tenev apologized to subscribers in email sent late Tuesday and explained that Robinhood’s system “struggled with unprecedented load” and crashed. The outages, the pair explained, were sparked by “highly volatile and historic market conditions; record volume; and record account sign-ups.”
Robinhood said its engineering team was working on fixes to prevent another embarrassing outage.
“We take our responsibility to you and your money seriously,” the pair wrote. “We recognize that many of you have questions, and we are working to respond to them as quickly as possible.”
The past two days have been disastrous for the startup, which is valued at $7.6 billion. The outages left users seething and some are threatening Robinhood with a class-action lawsuit. Robinhood has around 10 million users.
In response to the outages, Robinhood is compensating some customers with billing credits. It’s also giving premium members three months worth of service for free. The premium tier costs $5 a month.
Robinhood has been credited with revolutionizing the stodgy trading industry. It has forced established players to abolish commissions and even sparked the blockbuster merger of Charles Schwab (SCHW) and TD Ameritrade. (AMTD)
Correction: An earlier version of this story included an outdated valuation for Robinhood.
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