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The Wall Street Rebel That Wasn’t

Robinhood told a story that didn’t line up with its reality

By Jeromey Lloyd

GameStop sells video games the old-fashioned way: peddling physical media in brick-and-mortar stores in an industry where digital downloads now account for the majority of sales. It was 2013 when every major gaming device provided a way to circumvent stores and download its games directly, and GameStop has been struggling since. It has made flailing attempts are reinvention, but over time its value (NYSE: GME) started to suffer—between January 2019 and January 2020 alone, GME fell from $16 per share to $5.

GameStop’s 2021 trajectory has been anything but linear. Since New Year’s, GameStop has seen its stock price skyrocket, then drop, then jump again and shift wildly from week to week.

At first, this yo-yoing could be attributed to internet pranksterism; a community of investors from Reddit saw that hedge funds were trying to profit from GameStop’s decline, and they began investing in droves to keep its stock price elevated. But as news of this battle reached the mainstream and the issue became political and ethical, GameStop itself took a backseat to the investing app favored by Reddit’s traders: Robinhood has emerged as the face of a movement.

This was, initially, validation of the brand Robinhood had been building since its launch in 2013. Robinhood built its story around the promise that anyone could be an investor: a Wall Street renegade that offered access to markets and wealth that had previously been off-limits to many people. Through its marketing, customer experience and its very intentional name, Robinhood made it clear it was the ally of the new investor.

That story has since been turned on its head. As the GameStop stock went into a frenzy and media sources hyped Robinhood as a key driver of the populist effort to defeat institutional short sellers, users flocked to its platform to use it exactly as its founders had positioned it: a tool to stick it to the elites. This ultimate realization of Robinhood’s brand story carried to its most logical end undermined the company itself.

A brand’s story must be both empowering and authentic. On the first point, Robinhood was certainly effective (it has a reported 13 million customers). But when the movement to save GameStop hit a roadblock, it became clear that Robinhood was just as much a part of the Wall Street machine as the hedge funds it had been wielded against. Robinhood’s role in the GameStop movement was only possible due to its story, but it has exposed the lack of authenticity at its core—and the fallout will likely complicate its IPO.

Challenger and Upstart

Right from its founding in 2013, Robinhood positioned itself as an ally of the everyman. Its marketing promised: “People like us can trade just like the big guys.” Users download its trading app for free, and buy and sell stocks for free, lowering the barrier of entry for the stock market to ownership of a smartphone. This approach was revolutionary. In 2015, it reported more than 500,000 downloads and $2.9 million in revenue.

Robinhood adopted the language of other digital upstarts and adding a rebel slant. It could afford to work commission-free, it said, because it “cut out the fat that makes other brokerages costly—hundreds of storefront locations” and avoided publicity frivolities like naming stadiums (well-worn messaging for challenger banks and mobile carriers). The first version of its origin story, which described founders Vladimir Teniv and Baiju Bhatt as “innovators” and “digital natives” (as per the website in 2015), was honed over those early years to include more of their opinions on the financial establishment: “We’re on a mission to democratize our financial system,” the website’s About Us page said in December 2019. Tenev and Bhatt “realized that big Wall Street firms pay effectively nothing to trade stocks, while most Americans are charged up to $10 for every trade. They soon decided it was more important to build products that would provide everyone with access to the financial markets, not just the wealthy.”

Our mission is to empower this new generation to take greater ownership in their financial future, which we believe can help shrink the gap between the ‘haves’ and the ‘have nots’ and lead to a healthier, more robust global economy.

This is a crystal clear statement of purpose. It is effective precisely because it is focused neither on the features of benefits of the product, nor the company itself: it’s a hero-driven story that positions Robinhood as a capable mentor in a broken world of economic disparity, guiding everyday people toward even financial footing against Wall Street’s gatekeepers. It wasn’t just challenging other financial institutions from a branding perspective, it was challenging their very way of doing business.

This quest to shrink the gap between “haves” and “have nots” was designed to be an adventure: Robinhood’s user experience is inspired by fast-growing consumer app businesses rather than other trading platforms. For example, signing up a friend would earn a user one free share in a random company, and while that spin of the wheel might come up with a dud, but it might come up with Apple. Upon completing a successful trade, animated confetti splashes across the screen as a reward. Social media integration lets users see friends’ trades and view lists of the platform’s most-held stocks. These practices work perfectly to reinforce the brand’s promise.

By the end of 2019, Forbes reported Robinhood had 10 million users and $111 million in revenue. The commission-free model spawned a number of competitors such as Webull and Wealthsimple, and even grey-haired institutions like Charles Schwabb followed the example by offering commission-free trades.

The coronavirus pandemic accelerated growth dramatically. Thanks in no small part to waves of government stimulus and lockdown-induced boredom, Robinhood added another 3 million accounts between January and May 2020—nearly half of all online trading account activations for that period. Robinhood had rallied a massive, previously untapped group of young potential investors with a story of grassroots upheaval and a more approachable take on investing. Customers were buying the story completely.

A band of merry Redditors

r/WallStreetBets is a Reddit community of investors with a decidedly mischievous streak. The community has translated the hyperbolic swagger that the public expects of Wolf of Wall Street-style traders into something appropriate for the internet age. They invest for their own humor, trolling bad investors with disparaging memes and using the same language one would expect in a toxic chat room as opposed to on the trading floor. r/WallStreetBets is the equivalent of Goldman Sachs being overrun by 19-year-olds freebasing Mountain Dew. Its brash, contrarian character has attracted 9.7 million members who proudly label themselves “degenerates.” Many members of the community are experienced traders, but many are first-timers drawn to the casual and snarky vibe of its conversation threads. Unsurprisingly, these first-timers seek tips for getting started in investing, and Robinhood’s no-fee model and defiant marketing figures prominently in those discussions.

It was here that January 2021’s GameStop stock rollercoaster began. Upon learning that institutional investors were “shorting” the retailer’s stock (betting it would decrease in value and, to the eyes of some, profiting on the demise of a cherished childhood store), community members decided to see if they could disrupt this bet. Redditors started buying as much GameStop as they could, increasing demand, keeping the stock price high and ensuring hedge funds would be on the hook for billions to cover their losing bet.

While r/WallStreetBets can be more impish than activist, many people beyond that community joined the mission to boost GME as a way to make a statement against Wall Street elites. And for a class war playing out on the NYSE, there was no better weapon than Robinhood.

On January 27, 2021, GME hit $347 a share—up from $5 a year earlier. Vice reported that nearly half of all Robinhood users owned at least one GameStop stock. Melvin Capital, the main target of Reddit’s wrath, abandoned its position at a 53 percent loss on its overall portfolio thanks to its thwarted short.

Robinhood’s brand promise had flourished in the hands of customers who believed it, resulting something very real and market-changing. But the same day GME hit $347 per share, a regulatory reality exposed the lack of authenticity in its story. The Robinhood story began to buckle.


On January 27, Redditors began posting screenshots showing that Robinhood was blocking new purchases of GameStop stock. The company’s initial explanation was not terribly clear.

“Our mission at Robinhood is to democratize finance for all,” its statement began, ironically trying to use its so-far successful brand purpose to prep readers for bad news. “We’re proud to have created a platform that has helped everyday people… In light of recent volatility, we restricted transactions for certain securities to position closing only… We also raised margin requirements for certain securities.”

Essentially, people were limited to only selling, not buying, GameStop, and going forward Robinhood would no longer allow people to buy low volumes of the stocks in question. Market realities had met the promise of trades oriented toward the everyday investor head-on.

Suddenly, a legion of users who believed in the Robinhood story discovered that for as empowering as its message was, it lacked authenticity. When the narrative was carried to its logical end, Robinhood would not follow-through on its promise—it would hit “game over” for traders to protect itself. Regulators had seen the flurry of action on GME and asked Robinhood to put down enough cash to prove it could cover the millions of new transactions that its army of users were making—a bill of around $3 billion.

Robinhood’s total valuation was around $2 billion, so it suspended trading while it rushed to gather more funding. And when a firm is seeking to quickly raise billions in new capital, there are few places to turn: all of whom are the large, institutional investors Robinhood, on the surface, claimed to be against.

The cracks were starting to from. If Robinhood was a Wall Street outlaw, why was it beholden to Wall Street’s status quo? Why were the banks of Wall Street extending debt capacity to the little app that was threatening to tear them down?

The app had, essentially, turned its audience into a product to be sold to the same kind of company that audience had be told they were rebelling against.

The story that attracted so many amateur investors to Robinhood was wildly divergent from how the company actually operated. When users began to see that misalignment, they too splintered. The r/WallStreetBets subreddit now has hundreds of threads asking users to abandon the product and looking for alternative commission-free platforms. The timing couldn’t be worse for the disconnect in its story to be exposed: Robinhood is now approaching its own IPO amid turmoil. Its controversial confetti animation is gone, and Robinhood’s website now discloses much more about its revenue model.

Brands can see their story as one of two things: a slick veneer that fuels their marketing, or an articulation of their strategy to define who they are. Robinhood shows the risk inherent in the former: when a poorly-designed story is carried to its logical end, customers are quick to short the equity they have in the brand. Its organizations who design their story holistically—so that it authentically articulates purpose, and empowers customers—who benefit from customers’ long positions and increased lifetime value.


Jeromey is an associate at Woden. Want to stay connected? Read our extensive guide on how to craft your organization’s narrative, or send us an email at to discuss whatever your storytelling needs may be.