The app saw 2.1 million downloads in the United States on
Google Play and App Store last week, as traders on Reddit and other social
media platforms organized to buy stocks shorted by Wall Street hedge funds,
according to data from Sensor Tower. This marks a 394% jump from the previous
week for the San Francisco-based online broker.
This data could help ease Robinhood investor concerns that
trading curbs imposed last week to cope with the deluge in orders would cost
the app users ahead of a planned initial public offering later this year.
Many Reddit users had accused Robinhood of capitulating to
the hedge funds by slapping on the restrictions. Robinhood CEO Vlad Tenev has argued
the curbs were needed to safeguard its platform, given the collateral it needs
to post to backstop many of the trades.
The platform "experienced record growth during some of
the most challenging days operationally this past week as Robinhood continued
to lead the industry in app downloads last week by a wide margin,"
analysts at JPM Securities wrote in a note on Monday, citing data from
SimilarWeb.
Robinhood declined to comment.
Competing brokerage firms are also benefiting from the
retail trading boom. Social Finance Inc's app saw the biggest week-over-week
growth in percentage terms, at 900%, followed by Fidelity with 751%, Sensor
Tower said.
A survey from Mizuho Securities did show that some unhappy
Robinhood traders were leaving the app for platforms such as Cash, Stash and
Fidelity.
"We believe this could drive some level of account
movement, but the faster that firms like Robinhood get back to normal
operations, the less attrition we would expect," analysts at JPM wrote. - Reuters
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