Robinhood, Schwab Outages Triggered by Apple, Tesla Splits
(Bloomberg) -- It was an alarming series of breakdowns that baffled traders: as two of the most popular stocks split at the start of the week, thousands of U.S. retail investors couldn’t use their brokerage accounts.
Increased trading precipitated by Apple Inc. and Tesla Inc. share splits contributed to problems at Robinhood Markets and Charles Schwab Corp. when markets opened in New York on Monday, according to people familiar with the matter. Retail clients of Vanguard Group, TD Ameritrade Holding Corp.and Fidelity Investments also experienced disruptions.
While most of the issues were resolved by midday, the interruptions sent a shudder across Wall Street, where professionals have come to rely on the zeal of individual traders to propel a wildly volatile year.
Robinhood experienced a technical problem that caused delays to customer order status updates, though it didn’t face a system-wide outage, a spokeswoman said. Heavy traffic from Apple and Tesla’s corporate actions exacerbated the challenges, according to one of the people familiar with the matter.
Schwab made a change to the storage systems it uses to display price quotes, spokeswoman Mayura Hooper said. That clashed with Monday’s heightened volumes around the splits and touched off an error, another person familiar with the matter said. The issue wasn’t overall capacity, Hooper said.
“We have handled far greater volumes than we experienced on Monday as demonstrated by our site performance, which is at over 99.9% for the year,” Hooper said.
Fidelity did not respond to a request for comment. A Vanguard spokeswoman said the company has no reason to believe that the stock splits caused the glitch, declining to provide further details. A TD Ameritrade spokeswoman said problems on its site and app on Monday were “completely unrelated” to Apple and Tesla’s corporate actions.
Retail traders have made a roaring return to the stock market in 2020, as people with more spare time because of the Covid-19 pandemic are trading shares and options as they seek to profit from dislocations across the global economy. The online brokerages have enjoyed record sign-ups and trading activity as a result.
Among the market’s darlings are Apple, which split its shares 4-for-1, while Tesla’s split was 5-for-1. Though total trading volume increased in both stocks that day, neither hit record volumes in a year of extreme volatility.
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