Robinhood Shares Drop to Lowest Level since IPO

Friday saw shares of Robinhood Markets Inc plunge more than 14% and hit their lowest level since the stock’s IPO in July last year after the mobile-first brokerage witnessed a quarterly loss on Thursday evening. However, the stock reversed course to trade almost 6% higher on Friday, driven by a wider market rebound.

Positive results from Visa and Apple helped the US stock indexes increase on Friday marked by wild swings amid fears about aggressive rate hikes by the Federal Reserve and heightened geopolitical tensions between the West and Russia.

The stock was trading at $9.93 and climbed to $12.26 before the bell on Friday. In July last year, Robinhood share price at its IPO was $38 and its record high was $85 in August. For the three months ended December, Robinhood saw a net loss of $423 million and its costs increased twice.

Robinhood’s shares are more than 86% off their most recent high since its public market debut in July last year. The stock is down more than 34% in January, and this brings its market capitalization to less than $10 billion.

Just like several other top tech companies, Robinhood has yet to turn a profit following its IPO. The firm saw its monthly active users drop 8% from the consecutively previous quarter as the number of retail investors declined in the market.

Art Hogan, chief market strategist at National Securities in New York, talked about the development, saying:

“Robinhood was one of the pandemic darlings. Almost exactly a year ago, it sat at the center of the meme stock mania. And that has clearly cooled off as we headed into a new year. Its popularity seems to be on the decline. And its revenue growth is following in the wake of its declining popularity. So, when you sum all that together, it likely has a choppy road in front of it.”

Robinhood to Expand Its Investment Products

The development by Robinhood comes at a time when the newly public brokerage continues providing everyday people with easy access to the financial markets and pioneered the concept of zero-commission stock trading. The stockbroker is renowned for its fit to investors seeking a mobile app to invest in stocks, fractional shares, ETFs, options, and crypto-assets. The company is making heavy investments in its crypto business and has set aggressive goals to expand its cryptocurrency platform for international clients. Meanwhile, Robinhood plans to develop products aimed to support savings, spending and long-term investing. Some of the products that Robinhood intends to develop include instant debit card deposits and withdrawals.