Robinhood shares fall below IPO price in aftermarket trading on crypto downturn

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The Robinhood Markets, Inc. logo is seen during a pop-up event on Wall Street following the company’s IPO in New York, United States on July 29, 2021. REUTERS / Andrew Kelly

October 26 (Reuters) – Shares of Robinhood Markets Inc (HOOD.O) fell below their initial public offering price in after-hours trading after the retail broker reported lower earnings than expected for Q3 as trading levels for things like dogecoin cryptocurrency eased.

Robinhood shares fell 9.02% to $ 36.00 after the results were released, below the $ 38 they were listed at when the California-based company went public in Menlo Park, Calif. .

Robinhood, owner of the trading app that was at the center of January’s trading mania for so-called memes stocks, said in August that he expects retail investors to take a break in the third quarter.

In its second round of results as a public company, the company reported total revenue of $ 365 million for the quarter ended Sept. 30, up 35% from the previous year.

Analysts’ consensus estimate was $ 431.38 million in revenue, according to IBES data.

“Looking back at the second quarter, we saw huge interest in crypto, especially the doge, which has led to a large number of new clients joining the platform and record revenues,” said the chief executive of Robinhood, Vlad Tenev, on call with analysts.

“In the third quarter, crypto activity reached record levels, resulting in fewer new funded accounts and lower revenues.”

Last quarter, Robinhood said trading in dogecoin – a memes-inspired cryptocurrency – accounted for 62% of its cryptocurrency trading volume.

Income from stock trading fell 27% to $ 50 million.

Revenues based on cryptocurrency transactions increased 860% to $ 51 million from a year ago, but were well below their second quarter highs, Robinhood said.

A retail slowdown, one of the defining trends in the pandemic era, comes as the rollout of vaccines in the United States has helped the country ease restrictions and resume sports and other activities.

Reporting by Noor Zainab Hussain in Bengaluru and John McCrank in New York; Editing by Arun Koyyur and Sonya Hepinstall

Our Standards: The Thomson Reuters Trust Principles.

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