Avishek Das | LightRocket | Getty PhotographsRobinhood is redesigning a few of its app options — most notably ditching its confetti animation —amid
Avishek Das | LightRocket | Getty Photographs
Robinhood is redesigning a few of its app options — most notably ditching its confetti animation —amid scrutiny over the favored inventory buying and selling firm’s so-called gamification of investing.
The free-stock buying and selling pioneer, which is gearing up for its public debut, instructed CNBC the transfer is an effort to take away the “distraction” from its general mission to “democratize” investing.
“Previously, we used the identical confetti design to have fun firsts with prospects. These included prospects’ first trades, their first steps with money administration, and profitable referrals of family and friends. Now, we’re introducing new, dynamic visible experiences that cheer on prospects by means of the milestones of their monetary journeys,” Robinhood stated in a weblog submit on Wednesday.
Robinhood, which is seen as a gateway for younger traders to entry the markets, has lowered the barrier to entry for hundreds of thousands of retail traders. The platform gained an estimated 6 million customers in January and February alone, in response to SimilarWeb.
Nonetheless, lawmakers and regulators have accused Robinhood of being reckless towards its beginner traders by making mild of choices that contain actual cash.
Final 12 months, Massachusetts regulators filed a criticism in opposition to Robinhood, citing the corporate’s “aggressive techniques to draw inexperienced traders, its use of gamification methods to govern prospects, and its failure to forestall frequent outages and disruptions on its buying and selling platform.”
Robinhood instructed CNBC the confetti was merely about optimistic reinforcement to a technology of traders that has lengthy been shut out of the general public markets.
“We have additionally heard the criticism and we predict that will get distracting when the main focus begins to shift to some misconceptions, and that is what begins defining what you are doing,” Madhu Muthukumar, head of product administration at Robinhood instructed CNBC.
“That is additionally a superb signal to say ‘hey, we should always speak about this. We must always speak about what it’s we worth and never let everybody guess,” he stated.
New imagery for milestones
In an effort to fight a number of the criticism, Robinhood goes with new imagery.
The confetti with get replaced by the next picture when a buyer makes their first commerce.
Earlier this 12 months, Robinhood discovered itself in the midst of a firestorm amid the brief squeeze in GameStop, which was partially fueled by Reddit-driven retail traders.
On the peak of GameStop’s surge, Robinhood and different brokers restricted buying and selling of sure securities attributable to elevated capital necessities from clearing homes.
Final week, Robinhood filed confidential paperwork to pursue an preliminary public providing. CNBC reported earlier this month that Robinhood had chosen the Nasdaq for its IPO, in response to sources aware of the matter. Goldman Sachs has been advising the corporate on the IPO.