Stock trading app Robinhood experienced its third outage in eight days on Monday, as the Dow Jones Industrial Average plunged more than 2,000 points in its worst day since 2008, amid coronavirus fears and an oil price war.
In a tweet sent out shortly after the opening bell, the Menlo Park, California-based app said trading was currently down and it was investigating the issue. Robinhood said trading was partially restored an hour later, and confirmed the platform was fully operational shortly after 3:30 p.m.
- Monday’s outage followed last week’s incident that lasted for the majority of March 2’s trading hours and the following morning, causing users to miss out on the Dow's largest one-day gain since March 2009.
It’s been a rough week for Robinhood and its users, as the platform’s recent outages have coincided with historic trading days.
In a blog published March 3, Robinhood co-founders and co-CEOs Baiju Bhatt and Vlad Tenev said last week’s outages were caused by "stress on our infrastructure — which struggled with unprecedented load."
The S&P 500 fell more than 7% on Monday, triggering a circuit breaker that halted trading for 15 minutes, shortly after the opening bell.
Some analysts have questioned whether the app is up to task during such high volumes of trading.
Sarah Kocianski, head of research at 11:FS said last week’s outage points to a potentially larger issue for trading apps such as Robinhood.
"Are these apps fit for purpose? Can they actually do what they say they do; let the everyday person 'play' the markets?" she told Banking Dive.
Like last week, users once again voiced their anger on Twitter following the most recent outage, and a group called "Robinhood Class Action" has swelled to 8,000 members as of Tuesday morning.
The fintech’s most recent outage is likely to add more fuel to the fire as it also faces a federal lawsuit filed by a trader in Florida, following last week’s glitches.
"It wasn’t a temporary outage — this was a massive failure of their system for an entire day," Mike Taaffe, the plaintiff’s father and the attorney on the case, told CNBC on Thursday. "There were a number of people who were damaged because it was one of the most active days in the market."
But users hoping to be made whole through litigation could be disappointed. "[Robinhood’s] user agreement has language to the effect that they don't guarantee that the platform will be accessible at all times," Creighton University finance professor Robert Johnson told Banking Dive last week.
Following last week’s outage, a Robinhood spokesperson told TechCrunch it will offer compensation for users on a case-by-case basis.
Robinhood, which is valued at $7.6 billion, is popular among millennials and claims to have over 10 million customers.