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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, informed 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 rejoice firsts with clients. These included clients’ 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 clients by means of the milestones of their monetary journeys,” Robinhood stated in a weblog put up on Wednesday.
Robinhood, which is seen as a gateway for younger traders to entry the markets, has lowered the barrier to entry for tens of millions of retail traders. The platform gained an estimated 6 million customers in January and February alone, based on SimilarWeb.
Last year, Massachusetts regulators filed a complaint in opposition to Robinhood, citing the corporate’s “aggressive ways to draw inexperienced traders, its use of gamification methods to control clients, and its failure to stop frequent outages and disruptions on its buying and selling platform.”
Robinhood informed CNBC the confetti was merely about constructive reinforcement to a era of traders that has lengthy been shut out of the general public markets.
“We have additionally heard the criticism and we expect that will get distracting when the main target begins to shift to some misconceptions, and that is what begins defining what you are doing,” Madhu Muthukumar, head of product administration at Robinhood informed CNBC.
“That is additionally a great signal to say ‘hey, we must always discuss this. We should always discuss what it’s we worth and never let everybody guess,” he stated.
In an effort to fight a few 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 course of a firestorm amid the quick 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 because of 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, based on sources acquainted with the matter. Goldman Sachs has been advising the corporate on the IPO.