The GameStop Corp. website on a laptop and the Robinhood app on a smartphone.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Robinhood, which has been at the center of controversy after restricting equity trading, including GameStop, will release its first Super Bowl announcement.
The ad, which will kick off what the company says is its biggest brand campaign in history, contains the message, “You don’t have to become an investor. You were born.” The company said Sunday’s party announcement aims to highlight people from all backgrounds who invest “time in themselves, in the people and things they love,” whether it’s to start a business or change their hair color.
The stock trading app has faced a public relations crisis as angry customers respond to restrictions imposed last week on trading some high-volatility stocks.
A Robinhood user filed a class action lawsuit Thursday and Friday afternoon, thousands of investors used an online service called DoNotPay.com to automatically join the lawsuit. The lawsuit alleged that Robinhood limited trading in the shares of video game retailer GameStop “intentionally and consciously to manipulate the market.” On Tuesday, Robinhood withdrew more of its trading limitations, allowing customers to buy up to 100 GameStop shares.
Robinhood has denied these claims and noted an increase in the capital requirements of the Depository Trust & Clearing Corporation due to the retail investment frenzy in very short names like GameStop and AMC Entertainment.
“To put it in perspective, just this week, our mandatory deposit requirements related to equities multiplied by ten. And that was what led us to set temporary purchase restrictions on a small number of securities that clearing centers had increased their deposit, “the company said in a blog post on Friday.
The app seems to be benefiting despite the uproar: Robinhood led the industry in app downloads last week by a wide margin, according to JMP Securities analysis using SimilarWeb app data. The app recorded more than 600,000 downloads on Friday, compared to 140,000 on its best day in March during the pandemic market crash in 2020. Robinhood also raised another $ 3.4 billion from investors in the past two weeks to support its record customer growth, the company said. Monday.
The Super Bowl spot does not refer to recent events. Asked about how Robinhood planned to deal with customer claims that the company had breached its brand mission to “democratize finance for all” and how the Super Bowl ad was adapted to the way Robinhood communicates. with customers, Christina Smedley, director of marketing, said the company comes as customers join the app and want to know more.
“We thought it was a fantastic stage to remind people what we stand for and remind people why the company was created in the first place,” he said.
The company worked with MediaMonks agency and director Nina Meredith on the ad.
2020 was a huge year for retail investment, with major online brokers, including Charles Schwab, TD Ameritrade, E-Trade and Robinhood, boosting new accounts and trading activity. Smedley said the app is designed to reflect stories that customers have shared, whether it’s buying shares when they’re in the race or working a second job.
“We created and designed this narrative around stories that customers have told us,” he said. “We saw, throughout 2020, that there were more people coming into our platform.” He said customers have accepted offers such as the option to buy split shares on Robinhood.
Robinhood would not comment on how the company plans to secure existing customers and rebuild trust, or how it will handle any additional customer volume that a Super Bowl ad could bring, but noted the company’s recent blog posts. Among them was a post Tuesday about the two-day trade liquidation period. The message said the period “exposes investors and industry to unnecessary risks and is ripe for change.”
This week, Robinhood also posted a Twitter-promoted message that said, “We want to share with you what Robinhood believes and represents. Here’s the full story of our CEO, Vlad,” with a link to a post posted on USA Today by Vlad Tenev. Many customers responded to the tweet with negative memes or screenshots of their problems.
Nominations are open for 2021 CNBC Disruptor 50, a list of private companies that use innovative technology to become the next generation of large public companies. Present on Friday, Feb. 12 at 3 p.m. EST.