Stock-trading app Robinhood is changing how many people buy equities—and in doing so, potentially injecting some volatility into the stock market. Inspired by chatter on Twitter and Reddit, Robinhood users are snatching up shares of moribund companies such as GameStop and AMC, boosting prices and thwarting professional traders’ attempts to short those stocks.
“This is unnatural, insane and dangerous,” Michael Burry, an investor famous for being portrayed by Christian Bale in “The Big Short,” wrote about the recent GameStop stock spike (say that five times fast) in a now-deleted Tweet (as reported by Cnet).
Given how Robinhood is clearly disrupting finance (and finance IT), it’s worth looking at how much its software engineers make—and for that, we can turn to levels.fyi, which crowdsources compensation data for a variety of tech companies. While crowdsourcing isn’t the most scientific means for determining true compensation numbers, the data posted by levels.fyi generally tends to align with other sources, such as Glassdoor, which makes us a bit more comfortable about using it.
In exchange for generous salaries, Robinhood’s engineers must wrestle with a number of challenges, including rapid growth. According to CNBC, which drew its data from SimilarWeb, the app might have as many as 16 million active users. Internally, the current focus is on making the app more stable, especially given its traffic (and how angrily the user base will react if the app does down for even a few hours).
“As you’ve seen with this market, there’s things happening, different things happening every week,” Robinhood CEO Vlad Tenev recently told CNBC. “I think we have to avoid, you know running our business as if we’re responding to, you know, what’s in the news on a weekly basis.”
Just for comparison’s sake, Robinhood pays its software engineers far more than traditional financial firms such as Visa and Capital One, where compensation for entry-level software engineers might range anywhere from $100,000 to $125,000 once you factor in stock and bonuses. That shouldn’t come as a surprise: Startups often spend quite a bit on strategically hiring talent with highly specialized skills. That high compensation is also necessary to lure those skilled technologists from established companies with very deep pockets.
Can Robinhood survive its success and emerge as a more stable platform? Will it face increased competition from similar trading apps that want a slice of what’s clearly a very lucrative market? Those are two huge questions that could take years to answer. Not everyone who uses the app to buy and sell stocks is making money, but at least the company’s software engineers seem to be profiting very handsomely.