The Wall Street Rebel That Wasn’t

Robinhood told a story that didn’t line up with its reality

By Jeromey Lloyd

Challenger and Upstart

Right from its founding in 2013, Robinhood positioned itself as an ally of the everyman. Its marketing promised: “People like us can trade just like the big guys.” Users download its trading app for free, and buy and sell stocks for free, lowering the barrier of entry for the stock market to ownership of a smartphone. This approach was revolutionary. In 2015, it reported more than 500,000 downloads and $2.9 million in revenue.

A band of merry Redditors

r/WallStreetBets is a Reddit community of investors with a decidedly mischievous streak. The community has translated the hyperbolic swagger that the public expects of Wolf of Wall Street-style traders into something appropriate for the internet age. They invest for their own humor, trolling bad investors with disparaging memes and using the same language one would expect in a toxic chat room as opposed to on the trading floor. r/WallStreetBets is the equivalent of Goldman Sachs being overrun by 19-year-olds freebasing Mountain Dew. Its brash, contrarian character has attracted 9.7 million members who proudly label themselves “degenerates.” Many members of the community are experienced traders, but many are first-timers drawn to the casual and snarky vibe of its conversation threads. Unsurprisingly, these first-timers seek tips for getting started in investing, and Robinhood’s no-fee model and defiant marketing figures prominently in those discussions.

Backlash

On January 27, Redditors began posting screenshots showing that Robinhood was blocking new purchases of GameStop stock. The company’s initial explanation was not terribly clear.

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