Instead, by trying to hide a liquidity crisis, Robinhood created a brand crisis. A liquidity crisis is easy for a company like Robinhood to get out of — you just raise more money from the people who are lining up to hand it to you. A brand crisis, though, is a much trickier proposition to navigate. Robinhood told users that it existed to “democratize” finance; in the end, like so many other platforms, it turned out to be a monarchy.
I’m interested to see how the company will fare now that the jig is up.
Elsewhere: Who’s ready for two movies about WallStreetBets?
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