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Robinhood shares fall after retail broker posts drop in revenue, users

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Robinhood shares fall after retail broker posts drop in revenue, users

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Credit: REUTERS/ANDREW KELLY

Shares in Robinhood Markets Inc, the brokerage at the center of last year’s retail trading frenzy, slipped to a record low on Thursday after it posted a 43% fall in first-quarter revenue and a decline in monthly active users.

Adds CEO and CFO quote, detail and updates share price

April 28 (Reuters)Shares in Robinhood Markets Inc HOOD.O, the brokerage at the center of last year’s retail trading frenzy, slipped to a record low on Thursday after it posted a 43% fall in first-quarter revenue and a decline in monthly active users.

Shares of the Menlo Park, California-based firm dropped more than 12% to $8. 83 in extended trading following the results. The shares, which have lost more than 43% of their market value so far this year, were sold in its IPO last July for $38 apiece.

” For most of its history Robinhood operated during low interest rates and low inflation. This has been a time of rising markets, high prices, and low inflation. “Our customers now experience all three trends going the other direction, possibly for the first-time in their lives,” stated Vlad Tenev, Chief Executive Officer of Robinhood on a conference call with analysts.

Trading volumes have eased from last year’s frenetic pace when retail investors used the platform to pump money into shares of so-called meme stocks including GameStop GME.N and AMC Entertainment AMC.N.

Robinhood announced Tuesday that it would lay off approximately 9% of its full time employees. Rapid headcount growth has led to duplicate jobs and functions.

“We are moving back towards being a smaller company with a simpler operating model. This was evident in the decrease in force we announced earlier this month,” Jason Warnick, Chief Financial Officer said on a conference call with reporters.

High-growth tech stocks are under increasing pressure due to falling investor confidence and poor shares performance.

Robinhood, along with high-growth tech companies, has not turned a profit since it’s debut. The company reported a net loss of $392 million or $0. 45 per share in the three months ended March. It posted net losses of $1.4 million or $6 a year prior to its IPO. 26 per share.

Analysts had on average expected a net loss $0. 36 per share, according to IBES data from Refinitiv.

Total net revenues decreased to $299 million, compared with $522 million a year earlier.

Robinhood’s monthly active users fell 10% to 15.9 million for March 2022, compared with 17.7 million for March 2021. According to the company, users who have lower balances are responsible for the decrease in user activity.

Transaction-based revenue from cryptocurrencies, which has been a boon for Robinhood in previous quarters, fell 39% to $54 million.

Robinhood will reduce its workforce by 9 %

(Reporting by Manya Saini in Bengaluru and Hannah Lang in Washington; Editing by Aditya Soni, Will Dunham and Richard Pullin)

((Manya.Saini@thomsonreuters.com))

The views and opinions expressed in this article are those of the author, and not necessarily the views of Nasdaq, Inc .

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