Robinhood earnings show a company reliant on quieting retail traders and volatile crypto pricing

Shares? The place Robinhood

goes, it doesn’t want shares.

When the corporate went public in July, it made no bones that it is an organization constructed on progress assumptions and waist-deep on the earth of cryptocurrency buying and selling.

On Wednesday, the $41 billion no-fee buying and selling platform disclosed its first-ever quarterly earnings report and confirmed that, for higher or for worse, each of these issues stay true — and likewise that it’s going to greater than seemingly worsen earlier than it will get higher.

Robinhood’s income from crypto transactions for the quarter was $233 million, making up simply over half of its whole income of $565 million for the July interval. That year-over-year progress is staggering contemplating that Robinhood stated it made $5 million from crypto transactions within the second quarter of 2020, and the extremely unstable sector now a performs a key function within the firm’s future.

The corporate additionally disclosed that 60% of its 22.5 million web cumulative funded accounts traded crypto within the quarter.

Contemplating that Robinhood alerted traders to the truth that 34% of its crypto-trading income for the primary three months of the yr got here from Dogecoin, which is up nearly 6,200% in 2021 thanks in giant elements to Elon Musk’s tweets, that volatility may be extrapolated even additional.

However one factor that might tamp down one other wild quarter for Robinhood is that fewer folks will seemingly be utilizing it.

On a name with analysts Wednesday, Robinhood Chief Monetary Officer Jason Warnick was clear that the autumn won’t be as worthwhile because the winter or the summer time months, and that traders ought to assume decrease buying and selling volumes and income for the third quarter.

Robinhood, which continues to be smarting reputationally amongst retail merchants from its January choice to halt buying and selling on meme shares like GameStop

and AMC Leisure

and the peak of their brief squeezes, fell nearly by as a lot as 9% in after-hours buying and selling.

However regardless of reporting a topsy-turvy first public quarter, CEO Vlad Tenev minimize an optimistic tone on the decision with traders and analysts, talking broadly about his startup’s plans to create digital wallets, handle IRA accounts for customers and even increase internationally.

He even made a nod to the retail buying and selling “Apes” on Reddit.

Whereas answering a query about Robinhood’s plans to promote IPO shares of latest public firms on the platform, Tenev made a transparent level of utilizing meme-stock lingo, telling these on the decision that retail traders shopping for IPO shares have confirmed to be “comparatively diamond-handed.” | Robinhood earnings present an organization reliant on quieting retail merchants and unstable crypto pricing


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