A 20-year-old man who began trading stocks on the Robinhood app during the COVID-19 pandemic killed himself last Friday after logging in to his account to find a negative balance of $730,165, Forbes reported.
Alexander Kearns, a University of Nebraska college student, left a note expressing dismay over his apparent financial situation and questioning how he was able to even get the leverage to go that far into debt.
“How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” Kearns asked in the letter.
Bill Brewster, Kearns’ cousin-in-law, said the appearance of such overwhelming debt must have pushed Kearns into suicidal despair.
“When he saw that $730,000 number as a negative, he thought that he had blown up his entire future,” Brewster told Forbes. “I mean this is a kid that when he was younger was so conscious about savings.”
Making matters worse, there is a chance that the massive negative balance that apparently pushed Kearns to take his own life was not a full and accurate representation of his financial situation, and once all the transactions were settled, things may have looked much different. Forbes reports:
Kearns may not have realized that his negative cash balance displaying on his Robinhood home screen was only temporary and would be corrected once the underlying stock was credited to his account. Indeed it’s not uncommon for cash and buying power to display negative after the first half of options are processed but before the second options are exercised–even if the portfolio remains positive.
“Tragically, I don’t even think he made that big of a mistake. This is an interface issue, they have slick interfaces. Confetti popping everywhere,” says Brewster referring to the shower of colorful confetti Robinhood routinely deploys after customers make trades. “They try to gamify trading and couch it as investment.”
Kearns, who was living with his parents in Naperville, Illinois, expressed anger toward Robinhood in his note, saying he had “no clue” what he was doing when he entered the market during the volatile early days of COVID-19.
Citing privacy concerns, Robinhood would not disclose details about Kearns’ account situation.
“All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend,” a company statement read.