Robinhood to air its first Super Bowl commercial amid backlash
The controversial online brokerage Robinhood Markets will have its first-ever commercial debut during the Super Bowl this Sunday. The ad comes just as Robinhood has fielded a barrage of negative publicity in recent weeks and has raised billions of dollars to keep operations afloat.
Robinhood said the commercial is part of a larger marketing campaign called "We are all investors." The commercial will celebrate the growing ethnic and socioeconomic diversity of its app users, a company spokesperson told CBS MoneyWatch Wednesday.
The commercial films people from all backgrounds engaging in activities like hanging with friends and taking a morning jog. The narrator states that every adult is basically an investor because they regularly make short- and long-term investments, diversify their interests and realize gains and losses.
"You don't need to become an investor," the narrator concludes. "You were born one."
A 30-second Super Bowl ad costs an estimated $5.5 million this year.
Robinhood, which has about 13 million customers, announced it secured $3.4 billion in additional capital in the past week as stock market regulators and clearinghouses forced it to set aside more cash to help cover any souring of its customers' bets on such highflying stocks as GameStop and AMC Theatres.
The cash infusion will hopefully coax even more Americans to become investors, the company said.
"We're witnessing a movement of everyday people taking control of their own financial futures, many investing for the first time through Robinhood," the company's chief financial officer, Jason Warnick, said in a blog post. "With this funding, we'll build and enhance our products that give more people access to the financial system."
It has been a turbulent few months for Robinhood, dating back to December when regulators in Massachusetts filed a lawsuit against the company for allegedly targeting young, inexperienced investors with flashy gimmicks on its app that treat stock investing like a game. Robinhood was also fined $65 million by federal regulators for misleading its stock market customers about how the company makes its revenue from their trades.
Robinhood and other major trading platforms began restricting trades of GameStop shares last week after the video game company's stock skyrocketed to unusual heights.
The decision to restrict trades sparked fierce backlash from smaller investors and lawmakers including Ro Khanna and Alexandria Ocasio-Cortez, who questioned the fairness and even legality of such restrictions. Investors have since filed a class-action lawsuit against Robinhood.
Robinhood eventually eased its restrictions. Robinhood said in a company blog post that it halted some stock trades to meet Securities Exchange Commission depository regulations and "not because we wanted to stop people from buying these stocks."