Robinhood shares drop below IPO price in after-market trading on crypto downturn By Reuters
Â© Reuters. FILE PHOTO: The Robinhood Markets, Inc. logo is seen during a pop-up event on Wall Street following the company’s IPO in New York, United States, July 29, 2021. REUTERS / Andrew Kelly
By John McCrank and Noor Zainab Hussain
(Reuters) – Shares of Robinhood Markets Inc fell below their initial public offering price in after-hours trading on Tuesday after the retail broker reported lower-than-expected earnings for the third quarter, with lower trading levels for cryptocurrencies like dogecoin.
Robinhood (NASDAQ 🙂 shares fell 8.77% to $ 36.10 after the results were released, below the $ 38 they were listed at when the California-based Menlo Park company went public, in California, and well below the $ 85 they hit in August.
Robinhood, who owns the app that was at the center of the January trading mania for so-called meme stocks, said in August that he expected retail investors to take a hiatus https: // www. reuters.com/technology/robinhood-revenue-more -than-doubles-crypto-trading-boom-2021-08-18 in the third quarter.
The retail slowdown, one of the most significant market trends of the COVID-19 era, comes as vaccine deployments in the United States have allowed the country to ease pandemic restrictions and resume activities like sports and other entertainment.
âLooking back at the second quarter, we saw huge interest in crypto, especially the doge, which has led to a large number of new clients joining the platform and record revenues,â said the chief executive of Robinhood, Vlad Tenev, on call with analysts.
“In the third quarter, crypto activity reached record levels, resulting in fewer new funded accounts and lower revenues.”
Last quarter, dogecoin trading – a token that started out as a joke – accounted for 62% of Robinhood’s cryptocurrency trading volume.
Crypto revenue rose 860% from a year ago to $ 51 million, but was 78% below its second quarter level, Robinhood said.
Equity trading income fell 27% from a year ago to $ 50 million.
Total revenue increased 35% from the previous year to $ 365 million.
Analysts had expected revenue of $ 431.38 million, according to IBES data.
Robinhood said it has 22.4 million funded accounts, down slightly from last quarter but up 96.5% from a year earlier.
The retail slowdown continued into the current quarter, Robinhood said.
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