In 2020, wild fluctuations in stock markets caused by the pandemic turned millions of people into opportunistic investors. After stocks fell in March, veteran traders and Nasdaq newbies poured their dollars into buoyant tech companies like Tesla and Zoom, as well as companies hit by Covid restrictions, including airlines, restaurants and cruises.
To reflect a year of volatility and impulsive investing, Robinhood, the popular trading app that has created controversy by marketing it to the young, released a year-end data dump for its users. A press release promised that the Robinhood round-up will be “a special personalized experience that will guide you through your investment journey this year – from views on trades, your most memorable investing moments, big or small and other milestones along the way.”
Robinhood’s summary – available to anyone with an active account prior to December 15th – showed stocks bought, dividends and interest, which stocks in their portfolio they clicked the most, and other data.
Some people praised the abstract’s aesthetic and said they enjoyed figuring out how early they would adopt Robinhood. “We were thrilled to hear from many clients who enjoyed taking a peek at their investment year, from saving screenshots of their recaps to sharing them on social media,” a company spokesperson wrote in an email.
Robinhood is one of several popular consumer apps that include shareable, data-driven annual summary lists, like Spotify Wrapped, a round-up of the upbeat or appropriately depressing songs people heard in 2020, and Strava’s year in the sport that got the miles its users ran and cycled. These packages use upbeat language and engaging graphic design to encourage their users to share on social media.
But for most people, personal financial decisions are not as easy to share as, say, the most played artist of the year. They are private by nature.
Kareem Rahma, 34, a comedian and entrepreneur, wrote in an email that he “would never share this information publicly as it is much more sensitive than my listening habits on Spotify”.
Even so, many people posted screenshots of their round-up on social media. Many were impressed with the number of times they checked the price of certain stocks.
“Tesla has grown like crazy in general, and obviously its inventory has improved. So it was kind of weird how many times I apparently checked it,” said Eric Milligan, an information technologist.
The 29-year-old Jordan Bishop was also surprised by this slide in his summary. “Before you know it, you’ve checked it 10 times a day and it gives you a little dopamine boost each time,” he said.
“Robinhood Wrap made me realize that I was very obsessed with every dollar up or down in the market and it was just very unhealthy,” wrote Rajat Kamboj, a 20-year-old student, in an email. His recap told him that he had checked the value of his Tesla stock 18,656 times in 2020, averaging more than 50 times a day. (“They’re just a little connected,” was his summary.)
“As a self-directed brokerage company, we do not give investment advice,” a Robinhood spokesman said in a statement. “The goal of Robinhood Recap was to celebrate milestones and give people a broader view of their activities over the year so they can shape their behavior over the long term.”
The round-up became a meme on the snappy finance-focused subreddit WallStreetBets; A user created a parody version of a repeat item that revealed extensive losses. (“You made some risky calls …”)
“This year has seen an unprecedented surge in retail investment,” the Robinhood spokesman wrote. “We have welcomed millions of new customers to Robinhood, approximately half of whom are first-time investments. With Robinhood Recap, we wanted to remind both new and long-time customers of their investment journey. “
Robinhood added three million users this year for a total of 13 million. The app has become a favorite of young and inexperienced investors, attracted by free trading, free stock offers, and an engaging user interface that uses a July New York Times report dubbed the Silicon Valley Playbook of Behavioral Nudges and Push “Means notifications. “
The Times article states that Robinhood users trade risky products faster than clients of large brokerage firms. For example, Robinhood users bought and sold 88 times as many risky options contracts as Charles Schwab’s clients.
Several people said the round-up seems to fit into the company’s broader strategy of positioning itself as a lifestyle experience rather than just another boring trading platform to appeal to less sophisticated investors.
“Their bright and colorful user interface, easy access to margin accounts and options, and Robinhood Recap give me the idea that they are trying to appeal to younger people,” wrote Luke Thornburg, 19, in an email . “These younger people, who are generally inexperienced and more risk tolerant, might choose Robinhood because of these things.” He said that he lost money trading risky options when he first used the app.
“Spotify seems to be a clear comparison there,” said Bishop, the founder of a personal finance website that focuses on air travel. “I just find it fascinating and a little dangerous how personal finance and social media converge in this way.”
Gina Fuchs, 24, a community coordinator for a not-for-profit coding camp for young women, wrote in an email: “The app does a great job of making it accessible to small traders or people who dip their toes into the world of stocks (I!). and because of this, it is attractive to millennials. If the data had been captured more creatively, this would have been an interesting feature for them. “
While this year has been good for Robinhood from a business standpoint – a $ 200 million round of funding in August raised its valuation from $ 8.6 billion to $ 11.2 billion – the company has also been an intense one Subject to scrutiny of its practices.
After a 20-year-old user killed himself in June after mistakenly believing he had a negative $ 730,000 balance on the app, Robinhood faced a round of critical press about the app’s appeal to youngsters , inexperienced investors turned.
Last week, the Securities and Exchange Commission accused the company of “misleading customers about sources of revenue” and citing “repeated misrepresentation of failure to disclose receipt of payments from trading companies for forwarding customer orders to them.” Robinhood agreed to pay a $ 65 million fine. And on Wednesday, Bloomberg News reported that a complaint filed in San Francisco against Robinhood Financial could become a class action lawsuit.
“The deal relates to historical practices that do not reflect Robinhood today,” said Dan Gallagher, Robinhood’s chief legal officer, in a statement. “We recognize the responsibility that comes with helping millions of investors make their first investments and we are determined to continue developing Robinhood as we grow to meet our clients’ needs.”
Brett Robinson, a 28-year-old who works in film development, saw abstract as a cultural artifact of late capitalism. “It accidentally reminded me of the truism ‘if something is free, you are the product,'” he wrote in an email. “Of course, Robinhood is more interested in our involvement than in my piddly return.”