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 stock trading, including GameStop, will launch its first Super Bowl ad.
The announcement, which will kick off what the company says is the biggest brand campaign to date, contains the message: “You don’t need to become an investor. You were born one. ” The company said the ad for Sunday’s game is meant to highlight people from all walks of life who invest “time in themselves, in the people and things they love,” whether it’s starting a business or changing hair color.
The stock trading app has faced a public relations crisis as angry customers rejected the restrictions imposed last week on trading high-volatility stocks.
A Robinhood user filed a class action lawsuit on Thursday, and by Friday afternoon, thousands of investors were using an online service called DoNotPay.com to automatically join the lawsuit. The lawsuit alleges that Robinhood restricted the trading of GameStop video game retailers “intentionally and knowingly to manipulate the market.” On Tuesday, Robinhood canceled several of its trading limits, allowing customers to buy up to 100 GameStop shares.
Robinhood rejected these claims and pointed to an increase in capital requirements from Depository Trust & Clearing Corporation due to the frenzy of retail investments in heavily shortened names such as GameStop and AMC Entertainment.
“To put this in perspective, just this week, our mandatory stock deposit requirements have increased tenfold. And this led us to provide temporary purchase restrictions for a small number of securities that the clearing houses have increased their deposit. requirements for, “the company said in a blog post on Friday.
The app seems to have benefits despite the riots: Robinhood led the industry in app downloads by a wide margin last week, according to JMP Securities analysis using SimilarWeb app data. The app recorded more than 600,000 downloads on Friday, up from 140,000 on its best day in March, during the 2020 pandemic market crisis. Robinhood also raised another $ 3.4 billion from investors in recent years. two weeks to support record customer growth, the company said Monday.
The Super Bowl spot does not refer to recent events. Asked how Robinhood plans to respond to customer claims that the company has violated its brand mission to “democratize finance for all” and how the Super Bowl ad fits into the way Robinhood communicates with customers, marketing director Christina Smedley said the company sees customers joining the app and wanting to know more about it.
“We felt it was an excellent stage for us to remind people of what we stand for and to remind people why the company was created in the first place,” she said.
The company collaborated with MediaMonks and director Nina Meredith on commercials.
2020 was a huge year for retail investment, with large online brokers, including Charles Schwab, TD Ameritrade, E-Trade and Robinhood, seeing an increase in accounts and trading activity. Smedley said the app is meant to reflect the stories customers have shared, whether it’s buying shares when they’re running away or working on a second job.
“We created and realized that narrative around the stories that our customers told us,” she said. “We’ve seen more people come to our platform throughout 2020.” She said customers have accepted offers such as the opportunity to buy split shares from Robinhood.
Robinhood did not comment on how the company intends to secure existing customers and rebuild trust or how it will manage any additional customer volume that a Super Bowl ad could bring, but indicated recent blog posts from company. Among them was a post on Tuesday about the two-day settlement period. The station said the period “exposes investors and industry to unnecessary risks and is ready for change”.
This week, Robinhood posted a promoted post on Twitter, saying, “We want to share with you what Robinhood believes and represents. Here is the full story of our CEO, Vlad, ”with a link to an opinion published on USA Today by Vlad Tenev. Many customers responded to the tweet with negative memes or screenshots of their problems.
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