RIP Robintrack

Tyler Durden's Photo
by Tyler Durden
Monday, Aug 10, 2020 - 11:52 AM

Submitted by MarketCrumbs

Robinhood's meteoric rise over the last few years has undoubtedly caused an influx of new retail traders into the stock market.

Robintrack, which is a website that tracks the top holdings on Robinhood, has also gained popularity as it provided hourly updates on the most popular stocks. Unfortunately, Robintrack will be closing down after Robinhood said it will stop providing the feed that Robintrack uses to update its site.

"They said the reason they're doing this is because 'other people' are using it in ways they can't monitor/control and potentially at the expense of their users," Robintrack creator Casey Primozic said. "They feel it paints Robinhood as being full of day traders when they say most of their users are 'buy and hold.'"

"The trend data that is available on our web platform can be reported by third parties in a way that could be misconstrued or misunderstood," Robinhood said. "Importantly it is not representative of how our customer base uses Robinhood."

Primozic said Robintrack saw its site traffic jump to the tens of thousands per day as hedge funds and other financial firms contacted him about using the site's data and creating algorithms using it.

"They said it’s OK that I keep Robintrack up containing all data I’ve collected thus far, but no new data will be available once they shut down the API," Primozic said. He also said Robinhood is "interested in keeping the conversation open" about how to provide the data.

Since Robinhood users have certainly not been given the best reputation at times using the data, the move to cut off the data isn't surprising. The site did provide plenty of publicity for Robinhood, whether good or bad, that could've helped fuel its second quarter growth. Robinhood saw "payment for order flow" revenue nearly double to $180 million from the first quarter's $91 million. Robinhood also raised another $320 million last month at a $8.6 billion valuation.

Robinhood's popularity also appears to be benefiting other trading firms who purchase their order flow. Virtu Financial, which is the second-largest purchaser of Robinhood's order flow, saw trading income jump 180% in the second quarter compared to last year's second quarter.

"Having access to Robinhood flows in May and June was a great business," an equities trader told the New York Post. "You can almost see exactly how good it was in Virtu's numbers. And you can also see who really made the money, and it wasn't people buying Hertz at 60 cents."

Hopefully Robintrack will be able to come back as it has become one of the most fascinating ways to gauge the sentiment of an increasingly large number of retail traders.