Robinhood Stock Down by 70% Since August, Crypto Revenue Tanks

Robinhood Stock Down by 70% Since August, Crypto Revenue Tanks

Shares of Robinhood (HOOD) have dropped by 70% over the previous 4 months. The firm has suffered each popularity hits and income drops in Q3, which may very well be behind the drop in valuation.

Shares of Robinhood’s (HOOD) inventory closed at an all-time low of $25.94 on Nov 30, down practically 70% from August 2021. Near the beginning of August, the inventory was valued at simply over $70. The drop is a big blow for the buying and selling app, which has endured a tough yr.

The near-future appears to be like tough for the corporate, which is working in the direction of repairing its popularity. In the final month alone, Robinhood has been the topic of bearish calls, suffered a safety breach, and noticed a drop in crypto buying and selling income, as revealed in a financial report.

As for why there may very well be such a giant drop within the valuation, one partial cause may very well be the fading away of meme cash. In the second quarter of 2021, Robinhood’s income was boosted by the mania for Dogecoin (DOGE). Those trades accounted for greater than 60% of the $233 million generated by crypto that quarter.

A extra vital cause why Robinhood’s shares may need dropped is the appreciable lower in crypto income skilled in Q3 2021. The agency recorded solely $51 million in crypto-generated income, versus $233 million in Q2.

The firm launched its extremely anticipated IPO in late July 2021 and is taking steps to fight potential violations. It even employed a former Grayscale compliance chief to assist with regulation.

How will the brand new yr be for Robinhood?

The outlook for Robinhood going into the long run isn’t significantly shiny, both. The firm may flip itself round and discover renewed vigor with new merchandise, however there are some obstacles on the horizon.

The SEC serves as a kind of obstacles, as it’s now reviewing banning cost for order stream (PFOF). The authority fined Robinhood $65 million in December 2020 for charging “hidden” charges that fell beneath the PFOF mannequin. Robinhood receives a majority of its income from the latter, because it has a zero commissions enterprise mannequin.

Robinhood will hope that new options will assist appeal to customers and enhance income. It launched a recurring crypto funding function in Sept. 2021 and is engaged on different options to be launched later.

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