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The stock-trading app Robinhood quietly turned off a feature on Friday that allowed anyone to see which companies’ shares were surging in popularity—a feature that helped fuel recent improbable rallies in basket-case firms like Hertz and Kodak.
“We announced we’ve decided to streamline public information about trends in investor activity on our platform,” said a spokesperson for Robinhood. “Moving forward, our web platform will not display the number of customers who hold a particular stock on Robinhood.”
The company also said it is restricting access to its APIs, which are a software tool that allows third parties to pull data from websites.
Robinhood’s decision has already led one website that relied on the firm’s data to shut down. The site, known as Robintrack, created dashboards that showed what stocks were trending in close to real time.
In a recent interview with Coins2Day, the site’s creator, Casey Primozic, said Robintrack received over 300,000 visitors a month and praised Robinhood for sharing data—what his site terms “popularity data”—that other firms either kept private or charged large amounts of money to access.
Primozic confirmed to Bloomberg on Friday that he was shutting down the site, saying Robinhood decided to cut off the data over concerns that “other people”—presumably including Robintrack—were using the data in ways that could mischaracterize the company as pandering to day traders.
Primozic’s claim is consistent with comments that Robinhood provided to Coins2Day. Most notably, a company spokesperson stressed that the majority of the site’s users were “buy and hold” investors who acted as “thoughtful participants in the markets.”
The company’s comments appear to be a tacit attempt to counteract a recent spate of negative headlines that have characterized Robinhood as creating a FOMO mentality among users, in part by building a “gamified” casino-like interface. Robinhood drew particular criticism after a 22-year-old options traders committed suicide upon accruing what he believed was a massive financial liability.
“The whole thing with everyone seeing what ‘Robinhood traders’ are holding has been a PR headache, and I can’t imagine it brings them a ton of brand value,” says Ranjan Roy, a veteran trader who recently wrote a popular blog post about Robinhood’s business model.
Others have suggested on Twitter that Robinhood’s decision to cut off the data presages a move by the company to package and sell the information to hedge funds or other financial companies. The speculation appeared to be fueled in part by the fact Robinhood takes payments from Citadel Securities and others to channel customer orders to such firms—a common practice among brokerages.
The company spokesperson, however, said its decision to cut off access to data is not tied to making money.
“We don’t have plans to sell this data,” she said.
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