Robinhood shares the fall, the fault of crypto-currencies? – CVBJ

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What was considered one of the best years for Robinhood seems to end in utter disappointment. Robinhood released a rather disappointing earnings report yesterday and it knocked stocks down about 10%, is the cryptocurrency to blame?

Robinhood didn’t have the year he expected

After an extraordinary start to the year, Robinhood’s crypto-related revenue fell sharply.

The reason? The cryptocurrency environment has stabilized to some extent, resulting in a reduction in the number of users on the platform, especially a drop in funded accounts.

So, according to the report, Robinhood’s revenue associated with cryptocurrencies fell to $ 51 million in the third half of the year. Recall that during the second quarter, the published turnover amounted to 233 million dollars, a decrease of 78%.

While in terms of net income, these stood at $ 365 million, well below the $ 565 million seen in the second quarter.

In this way, the company’s shares collapsed as market expectations were not met; in fact, the market forecast was for a net profit of $ 437.1 million this quarter.

Robinhood shares fall after supporting its third quarter results. Source: MarketWatch

Thus, the company announced an adjusted net loss of $ 2.06 per share, or $ 1.32 billion, while analysts’ expectations were a loss of $ 0.67 per share.

Will he recover in the last quarter?

Robinhood has warned that trade headwinds will persist until the end of the year. And, beyond that, they say the investing fads Robinhood experiences make results unpredictable.

According to Barron’s, during the call, the company’s CEO, Vlad Tenev, explained that “historically our growth has been in waves.”

He also added that “the surges have occurred during periods of heightened volatility or market events. We have also seen new customers join us as we add new products and features, which gives us some control over our growth. For the future, we hope that these trends will continue. ‘

They will proceed with caution when it comes to cryptocurrencies

Additionally, Tenev told CNBC that the second quarter was prompted by “one of those idiosyncratic market events where there is massive interest specifically in Doge.” And, since they will continue to invest in cryptocurrencies for the long term, he explained that it is impossible to accurately predict quarterly profits.

Regarding the future of Robinhood’s relationship with cryptocurrencies, Tenev assured that they will wait for more regulatory clarity before adding more digital currencies to the platform.

We want to hear from you! Do you think Robinhood will be able to recover from this? Or, on the contrary, will you have great challenges?

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