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Robinhood shares drop below IPO price in after-market trading on crypto slowdown

Stock MarketsOct 26, 2021 07:45PM ET
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© Reuters. FILE PHOTO: The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly

By John McCrank and Noor Zainab Hussain

(Reuters) -Robinhood Markets Inc's shares fell below their initial public offering price in after-hours trading on Tuesday after the retail broker reported softer revenue than expected for the third quarter as trading levels declined for cryptocurrencies like dogecoin.

Shares of Robinhood (NASDAQ:HOOD) were down 8.77% at $36.10 following the release of the results, below the $38 they were priced at in the Menlo Park, California-based company's July IPO and well below the $85 they hit in August.

Robinhood, which owns the app that was at the center of January's trading mania for so-called meme stocks, said in August it expected retail investors to take a breather https://www.reuters.com/technology/robinhood-revenue-more-than-doubles-crypto-trading-boom-2021-08-18 in the third quarter.

The slowdown in retail trading, one of the standout market trends of the COVID-19 era, comes as vaccine rollouts in the United States have helped allow the country to ease pandemic restrictions and activities like sports and other entertainment to resume.

"Looking back at Q2, we saw a huge interest in crypto, especially doge, leading to large numbers of new customers joining the platform and record revenues," Robinhood Chief Executive Officer Vlad Tenev said on a call with analysts.

"In Q3, crypto activity came off record highs, leading to fewer new funded accounts and lower revenue."

Last quarter, trading in dogecoin - a token started as a joke - made up 62% of Robinhood's cryptocurrency transaction volume.

Crypto revenue rose 860% from a year earlier to $51 million, but was 78% off its second quarter level, Robinhood said.

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

Total revenue rose 35% from a year earlier 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 trading slowdown has carried over into the current quarter, Robinhood said.

Robinhood shares drop below IPO price in after-market trading on crypto slowdown
 

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Comments (6)
Daniel Smith
Daniel Smith Oct 26, 2021 10:40PM ET
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14.95 per trade coming back
Glenn Ebersole
Glenn Ebersole Oct 26, 2021 9:13PM ET
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All easy money gone.
Ed Glass
EddieG Oct 26, 2021 7:39PM ET
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they all went back to the sports gambling.
John Laurens
John Laurens Oct 26, 2021 6:54PM ET
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These guys are the cheaters who skewered people on the gamestop stocks right?
jonathon blackmon
jonathon blackmon Oct 26, 2021 5:50PM ET
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pfof can never be banned
Ronnie Fierro
Ronnie Fierro Oct 26, 2021 4:33PM ET
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Its not a slowdown of retail trading, its the millions of users that continue to transfer out of robinhood… sinking ship with gensler talking about banning pfof
 
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