The free stock trading app Robinhood crashed and shut down for not one, but two days on March 2 and 3, 2020.

A brief on Robinhood…

Robinhood stock trading app was a game changer when it came to scene, introducing free stock trades. Users had the freedom and the user-friendliness to get involved in the stock market through the app. The Silicon-Valley company has a 6-year history, 908 employees and 10 million users worldwide as of now. During their last fundraising, the company was valued at $7.6 billion.

Robinhood Crash

Robinhood application crashed for two days on what is called as the “worst possible days” to have a crash in the stock market. In recent weeks, the stock market has been plummeting on and on as fears of CORONA Virus spread across the globe. On March 2, 2020, however, the stock market bounced back miraculously. Monday marked the biggest gains in a single day in the history of stock trading, recording an estimate $1.1 trillion in turnover. The Dow closed up 5.1% and S&P 500 closed up 4.6%. And Robinhood users were shut away from this opportunity.

The company issued a statement after “fully recovering” from their issues on March 3, 2020. Baiju and Vlad, Co-Founders and Co-CEOs of the company credited the app crash due to “stress on infrastructure;”

“We now understand the cause of the outage was stress on our infrastructure—which struggled with unprecedented load. That in turn led to a “thundering herd” effect—triggering a failure of our DNS system.”

blog.robinhood.com

What caused this unprecedented load on their systems?

“…highly volatile and historic market conditions; record volume; and record account sign-ups.”

While these reasons may not be acceptable, these issues are to be expected in any digital framework.

Compensation for opportunity losses?

It is said that Robinhood is looking at different and undisclosed modes of compensation for users. The first step of the process being, providing three months free subscription for premium users. A month’s premium subscription costs $5. Hence, a $15 compensation for a loss of what? For other users, they are said to tackle compensations “case-by-case.” 10 million cases to handle?

Either way, the company claims that the systems are back to normal and it is business as usual.

Whatever said and done, at the end of the day, a lot of online businesses rely on customer trust. And once trust is broken, it is very hard to repair it. Hopefully, we will see clear roads ahead for investors on this app.