WHY ROBINHOOD SHUT DOWN

Due to popular demand, here are my thoughts about the Robinhood Investing App outage, and what this means moving forward – Enjoy! Add me on Instagram: GPStephan

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Yesterday, Monday March 2nd…Robinhood shut down and its users were unable to have access to their account and trade stocks. People were panicking that they had unexecuted trades, had shorted the market and wanted to cash out, or wanted to buy in at a time where the market was soaring back to life.

However, if that wasn’t bad enough…Robinhood was able to get the app working again after the trading day was over…but then again, the NEXT DAY…this morning, the app goes down, AGAIN.

Now, as far as what caused this….we don’t have any definitive proof…but, there’s a thread with nearly 30,000 upvotes on Reddit that mentions that…MAYBE…the reason the app was shut down was because of a coding error that didn’t account for February 29th, the Leap Year.

Although, to be fair…Robinhood recently DENIED this on twitter, saying that: “The outage was not caused by a failure to code for the leap year. We had instability in a part of our infrastructure that allows our systems to communicate with each other.”

Another POSSIBLE reason for this, though, may have come from unusually high trading volume that Robinhood was not expecting…and, objectively, that would also make sense, because temporary brokerage outages like this are not JUST limited to Robinhood. Both Fidelity AND Vanguard experienced brief delays on an exceptionally busy trading day.

Right now, it’s being announced that Robinhood will be offering “Case by Case” compensation for its outage…and according to TechCrunch, “The company would consider offering billing credits or other, undisclosed forms of compensation. It also added that no customer data, information, or funds were lost during the outage.”

But, really…here’s what we all need to be aware of. I think this goes without saying…no matter WHICH brokerage you use, you NEED to make sure you never have too much money in one platform, and you need to realize that if this can happen to Robinhood – it can happen to ANY STOCK TRADING APP.

All of these apps and companies are still RELATIVELY new, and they haven’t proved the test of time in terms of how sustainable they’ll be, long term. We need to remember that many of these companies are considered START UPS…and there WILL be issues. I use apps like Robinhood, WeBull, Acorns, and M1 finance for fun side investments that I can play around with – all with $0 stock trading…but I DON’T use them for holding all of my wealth, and I wouldn’t trust any ONE app with more than I’m comfortable with.

It’s probably a good idea to go with a brokerage that has a proven track record long term, and to use free stock trading apps as a way to play around with Fun Money…at least until they become more developed.

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