Robinhood had to install protective glass after frustrated traders kept showing up at its office
- Frustrated traders occasionally show up at Robinhood's California headquarters, The New York Times reported.
- According to the paper, things got so bad that Robinhood eventually installed bulletproof glass near the entrance.
- Update: A Robinhood representative clarified that the glass is not technically "bulletproof," as the Times said, but more widely available protective barrier.
- The app pioneered free stock trading, but its gamelike interface and availability of highly risky products have put it under intense scrutiny.
So many frustrated traders have showed up at Robinhood's Silicon Valley headquarters that the stock-trading app installed bulletproof glass, The New York Times reported this week.
An explosion of stock-market volatility as the global economy grapples with a pandemic, coupled with record unemployment, has caused a surge in interest for the app, which pioneered commission-free stock trading for a much younger audience than traditional brokerages.
But as Robinhood grew, it added more complex products that are inherently risky. Those products, combined with Robinhood's gamelike interface and relative lack of educational features that are prominent on older platforms, mean there's real risk of massive losses for the platform's traders, who are about 31 years old on average. The company declined to share user portfolio performance with the Times.
Following the publication of this story, a Robinhood spokesperson told Business Insider that the glass is not technically "bulletproof," as reported by the Times, but rather protective glass similar to other offices or banks. High security is commonplace in tech offices throughout the world, given their high profiles and wide user bases.
Such massive risk was on full display last month when a Robinhood trader killed himself after seeing a negative six-figure balance, which was likely the result of some incomplete trades of complex options products. In an interview, the 20-year-old's family pushed for changes to the app that would not flash such balances. Suicide is complex, and the reasons behind a suicide are not always immediately clear.
After the trader's death, Robinhood announced a slew of changes geared toward explaining complex trades. The company said it would improve in-app messages and emails about multileg options spreads, add new details to better help users "understand the mechanics of early options assignments," and work to change parts of its user interface.
When all is said and done, however, they'll likely still be losing money on average. Research shows, time and again, that people picking single stocks perform worse than market indexes.
Read the full New York Times profile of Robinhood's growing pains here.