The GameStop Corp. website on a laptop and Robinhood application on a smartphone.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Robinhood, which has been at the center of controversy after restricting stock trading, including GameStop, will post its first Super Bowl ad.
The ad, which will begin what the company says is the biggest brand campaign ever, carries the message, “You don’t have to be an investor. You were born there.” The company said the ad for Sunday’s contest is to highlight people of all backgrounds who “spend time in themselves and in the people and things they love,” be it starting a business or making changes. of their hair color.
The stock trading app has faced a public relations crisis as angry customers reverted to the restrictions imposed last week on trading some highly volatile stocks.
A Robinhood user filed a class action lawsuit on Thursday, and by Friday afternoon, thousands of investors were using an online service called DoNotPay.com to automatically join the lawsuit. The lawsuit alleged that Robinhood had restricted trading in video game retailer GameStop stock “purposefully and deliberately to manipulate the market.” Robinhood rolled back more of its trading restrictions on Tuesday, allowing customers to buy up to 100 shares of GameStop.
Robinhood has denied those claims, pointing to an increase in the Depository Trust & Clearing Corporation’s capital requirements due to the frenzy of retail investing in heavily shorted names like GameStop and AMC Entertainment.
“To put it in perspective, this week alone, our clearinghouse-imposed deposit liabilities related to equities have increased tenfold. And that’s what prompted us to introduce temporary purchase restrictions on a small number of securities whose clearing houses had raised their deposits. requirements, ”the company said in a blog post Friday.
The app appears to be benefiting despite the uproar: Robinhood led the industry by a wide margin in app downloads last week, according to JMP Securities analysis using SimilarWeb app data. The app saw more than 600,000 downloads Friday, compared to 140,000 on its best day in March of the 2020 pandemic market routine. Robinhood also raised an additional $ 3.4 billion from investors over the past two weeks to support record customer growth. the company said. Monday.
The Super Bowl spot does not refer to the recent events. Asked how Robinhood intended to respond to customer claims that the company had broken its brand mission “to democratize finances for everyone,” and how the Super Bowl ad fits the way Robinhood communicates with customers, chief marketing said officer Christina Smedley that the company sees customers join the app and want to know more about it.
“It felt like this was a great stage for us to remind people of what we stand for and to remind people why the company was founded in the first place,” she said.
The company collaborated with agency MediaMonks and director Nina Meredith on the ad.
2020 has been a huge year for retail investing with major online brokers including Charles Schwab, TD Ameritrade, E-Trade and Robinhood seeing new accounts and trading activity booming. Smedley said the app aims to display stories that customers have shared, whether it’s buying stock when they run or for a second job.
“We created and crafted that story around stories that customers have told us,” she said. “We saw more people on our platform throughout 2020.” She said customers have embraced offerings such as the ability to buy fractional shares on Robinhood.
Robinhood declined to comment on how the company plans to insure existing customers and rebuild trust, or how it will deal with any additional customers a Super Bowl ad might bring, but it pointed to recent blog posts from the company. Among them was a report on the two-day trade settlement period on Tuesday. The post said the period “exposes investors and the industry to unnecessary risk and is ripe for change.”
Robinhood also posted a promoted post on Twitter this week saying, “We want to share with you what Robinhood believes and stands for. Here is the full story of our CEO, Vlad,” with a link to an opinion piece on USA Today by Vlad Tenev. Many customers responded to the tweet with negative memes or screenshots of their issues.
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