Yahoo Finance Robinhood is still the app of choice for retail investors: new data
The mass exodus of customers from Robinhood has yet to materialize.
Angry investors cried foul last week when the free trading app pioneer slapped temporary restrictions on how customers could trade Gamestop (GME), AMC (AMC) and other heavily shorted stocks.
The hashtag #BoycottRobinhood immediately started trending on Twitter as users threatened to flee the app, whose motto is “Investing for Everyone.”
Taking my $12 and I’m leaving Robinhood for good, only TD and WeBull now
— Mass (@Nappy_Pappy) January 28, 2021
But new data shows just the opposite appears to be happening. Despite the controversy, Robinhood led the industry in app downloads last week, according to JMP Securities’ analysis using SimilarWeb app data.
Robinhood had more than 600,000 people download the app on Friday, compared with 140,000 on its best day in March during the pandemic-induced market sell-off. While downloads don’t necessarily mean new accounts, the number still shows record interest in the app.
The spike in downloads came even though Robinhood was forced to tap credit lines and raised $1 billion from investors to meet capital requirements from its clearinghouse amid the trading frenzy. Robinhood said on Monday that it had raised another $2.4 billion from its investors, for a total of $3.4 billion.
In a note to clients, JMP Securities analyst Devin Ryan said, “Robinhood has actually been adding a tremendous amount of new accounts, both leading into the past week, but also experienced record growth during some of the most challenging days operationally this past week.”
That’s not to say there were no defectors. Robinhood rival Webull’s CEO told Yahoo Finance on Thursday, “there was a huge influx of brand new customers to its platform.” New account signups Thursday were 1,578% higher than the 7 day average, according to Bloomberg. The Chinese firm’s trading app ranked as the second most popular free iPhone app in the U.S. behind only Robinhood — up from No. 60 on Wednesday, according to app-tracking firm SensorTower.
The micro-investing app, Acorns saw its daily user growth soar amid the Robinhood drama as its app climbed to No. 15 in the App Store.
“What we saw was from Tuesday to Wednesday, new user accounts doubled, and from Wednesday to Thursday, new user accounts doubled again,” Acorns CEO Noah Kerner told Yahoo Finance Live.
January is historically a busy month for new user signups at the company but “we went from about 10,000 to 20,000 to 40,000 and we’re sustaining near or around that level,” Kerner said.
Square’s Cash App also emerged a winner, according to a survey from Mizuho Securities. Nearly 40% of the 80 survey respondents who switched to other retail trading apps said they moved to Square’s Cash App.
Other popular choices for those fleeing Robinhood were Fidelity, TD Ameritrade, and Stash. Fifty percent of those who reported leaving Robinhood said they would consider returning at some point, according to the Mizuho survey.
Alexis Christoforous is an anchor on Yahoo Finance. Follow her on Twitter @AlexisTVNews.
Read more about Robinhood, Reddit and GameStop:
Robinhood halts buying of GameStop and other hot stocks, infuriating users
Robinhood CEO: The retail investors that have felt 'talked down to' are now 'empowered'
What is Wall Street Bets, the upstart Reddit group that is pummeling Wall Street?
'Fighting 100 mini Mike Tysons': The powerful influence of Reddit trade
Analyst on GameStop: ‘If you want to gamble, go to a casino’
'I love you guys': Redditor betting on GameStop used profits to pay off student
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