Robinhood Aims New Social Platform At Reddit's WallStreetBets

Soon, Robinhood Markets Inc.’s retail traders won’t have to leave the platform to brag about their positions or post taunting memes celebrating their investment victories. The online brokerage is breaking into social media.

The company will invite a small group of customers to join Robinhood Social early next year, then broaden the availability later, the company said in a statement Tuesday. Initially, all posts by traders will be required to include a trade of equities, options or other assets. Those positions will continue to update in real time after they’re shared, and comments on posts will be allowed.

“We always thought it was something that we wanted to get into more of, especially with social and investing becoming more and more tied together,” Abhishek Fatehpuria, vice president of product management at Robinhood, said in an interview.

Investors also will be able to follow the moves and statistics of other users who join Robinhood Social, including their one-year and daily profit and loss statements and profit rates. Profiles for public figures, such as former US House Speaker Nancy Pelosi and billionaire hedge-fund manager Bill Ackman, for example, will also be on the platform, with their trades populated via public disclosures required by law.

It’s a return, of sorts, to the origins of the firm. Before launching as a trading platform, Robinhood founders Vlad Tenev and Baiju Bhatt conceived of an online community for sharing investing information. Since the beginning, Robinhood traders have been more active on social media than other brokerages’ customers, comparing trading strategies with accompanying screenshots and commentary.

No period of time captured that sense of community more than the depths of the Covid-19 pandemic, when novice investors flocked to Reddit and its WallStreetBets section. Robinhood now wants to harness that sustained enthusiasm for investing and the markets, while keeping it within the confines of its own ecosystem.

While it’s unlikely Robinhood customers will ditch their existing accounts on other social-media platforms, Robinhood Social provides something Reddit and other platforms don’t, Fatehpuria said.

“How do we leverage this to upgrade the entire ecosystem of social discussion about investing, and bring legitimacy to it?” he said. Credibility will come from Robinhood Social users knowing actual trades are being made by a real person behind each post, Fatehpuria said, instead of what could be a doctored screenshot shared on an external platform. “There are things that are only possible on our platform.”

Direct messages, the sharing of links and images, and other common social-media capabilities are likely to come later, Robinhood said.

In addition to the social-media platform, the company will give retail traders the ability to take short positions in stocks, generally considered a more advanced investment strategy. Select index options also will be available for overnight trading beginning early next year, Robinhood said.