Robinhood shares fall below IPO price in post-sale trading on crypto slowdown

The Robinhood Markets, Inc. logo is seen at a pop-up event on Wall Street following the company’s IPO in New York, U.S., July 29, 2021. REUTERS/Andrew Kelly/File Photo /File Photo

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Oct 26 (Reuters) – Shares of Robinhood Markets Inc (HOOD.O) fell below their initial public offering price after hours trading on Tuesday after the retail brokerage reported weaker-than-expected earnings for the third quarter as trading levels declined for cryptocurrencies like dogecoin. .

Robinhood shares fell 8.77% to $36.10 after the earnings release, below the $38 they were listed for in the Menlo Park, Calif.-based company’s July IPO. , and well below the $85 they reached in August. Read more

Robinhood, owner of the app that was at the center of January’s trading craze for so-called meme stocks, said in August it expected retail investors to take a breather in the third quarter.

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The slowdown in retail, one of the most prominent market trends of the COVID-19 era, comes as U.S. vaccine rollouts have allowed the country to ease pandemic restrictions and resume COVID-19 pandemic. activities such as sports and other entertainment.

“Looking at the second quarter, we saw huge interest in crypto, especially doge, which led to a large number of new customers joining the platform and recording revenue, the managing director said. of Robinhood, Vlad Tenev, on a call with analysts.

“In the third quarter, crypto activity hit record highs, leading to fewer new funded accounts and lower revenue.”

Last quarter, dogecoin trading – a token that started out as a joke – accounted for 62% of Robinhood’s cryptocurrency trading volume.

Crypto revenue was up 860% year over year to $51 million, but was 78% below its second-quarter level, Robinhood said.

Equity trading revenue fell 27% from a year ago to $50 million.

Total revenue increased 35% over the prior year to $365 million.

Analysts had expected revenue of $431.38 million, according to IBES data.

Robinhood said it had 22.4 million funded accounts, down slightly from last quarter but up 96.5% from a year earlier.

The retail downturn continued in the current quarter, Robinhood said.

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Reporting by Noor Zainab Hussain in Bengaluru and John McCrank in New York; Editing by Arun Koyyur and Sonya Hepinstall

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