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Jonathan Levin

Robinhood’s Era of Fun and Games Comes to an End

The commission-free platform enticed a generation into believing stock trading was easy and entertaining. Those days are gone.

Shares of Robinhood have declined three-quarters since its IPO.

Shares of Robinhood have declined three-quarters since its IPO.

Photographer: Chris Delmas/AFP/Getty Images

It’s the end of an era for Robinhood Markets Inc. — and perhaps financial markets broadly. The Silicon Valley operator of a commission-free stock trading platform is cutting 9% of its 3,800-person workforce less than a year after its splashy initial public offering, a move that may well draw the curtain on the era of extreme market optimism that enticed a generation into believing trading was easy and entertaining.

Robinhood became the go-to app for novice traders during the greatest period of speculative excess since the dot-com bubble, when incomprehensible stock moves suddenly became routine. In January 2021, shares of then-moribund retailer GameStop soared in a sort of mob message-board rally. In May, college kids got temporarily rich (and then poor again) from Dogecoin, a joke cryptocurrency with a Shiba Inu dog for a logo. Meanwhile, $1 trillion market capitalizations became increasingly commonplace among tech firms, and Cathie Wood’s Ark Innovation ETF — filled with speculative, low-cash-flow bets on big ideas — returned some 350% in about 11 months.