Learning From Robinhood Public Relations


The investment platform, Robinhood, had spent years perfecting its brand, by promising to make it easier for the public to invest and trade stocks. However, suddenly, with a very controversial move, one where the platform decided to stop trading certain shares, it effectively managed to take down all of those years of customer and brand loyalty. And to get back in its customers’ good graces, Robinhood now has to continue navigating through open communication and a lot of transparency. When it comes to financial services and products, these companies are largely built on objectivity and consumer trust. And when a company decides to violate those important values, the business is headed directly into a PR crisis.

What Happened

Robinhood recently faced a lot of public scrutiny when the company decided to limit customers buying GameStop shares, along with several other volatile businesses, such as the theater chain AMC Entertainment Holdings. These stocks were at the core of a frenzied rush by different retail investors who were trying to make a lot of money at the expense of the short sellers who had been betting against them for several weeks, which resulted in the famous squeeze. Although this freeze in buying has since been resolved, the response from the limitation was instantaneous, as the platform’s customers drove down the company’s ratings by sharing negative reviews on the Google Play Store. Additionally, several US politicians have commented on the company’s actions. It’s now facing a class-action lawsuit as well as a review by the SEC.

However, according to Robinhood, the company didn’t really have a choice, because the reason behind the freeze had been beyond the platform’s administration. Nevertheless, now, the business has to work hard to regain public and consumer trust, as well as repair the damage to the brand.


Robinhood ended up losing the confidence of its consumers, simply because it didn’t communicate with the public on what was going to happen, before taking any sort of action. The best way for the business to now rehabilitate the brand and mitigate any other consumers from leaving the platform, is to educate everyone involved, as well as any potential future consumers, on why the company decided to take those actions. Other than that, Robinhood now has to show the public as well as its users that the platform and the business are still on the side of its consumers and not on the side of the hedge funds, as the public currently believes. The company took the right step when it decided to communicate with the public through a blog post, explaining why it decided to stop trading the stocks in question – because the company wasn’t able to meet the immediate clearinghouse deposit requirements, and not as its consumers’ believed, that the company wanted to stop people from buying those specific stocks.

Now, we’ll have to wait and see whether Robinhood will be able to overcome this crisis and continue to be proactive in working with crisis communications professionals to develop a strong strategy to combat all of the negative attention.

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