Robinhood shares reach 10% after crypto income plummets by three quarters


Robinhood (HOOD) shares fell sharply due to the company’s third quarter results, which posted lower than expected crypto trading earnings.

The popular retail company released its third quarter report on October 26, with crypto accounting for $ 51 million (19%) of the $ 267 million in transaction-based revenue in the quarter.

The report’s release on Tuesday coincided with HOOD falling around 10% to $ 35.70, but the price has since gained 1.9% to sit at $ 36.40 at the time of writing.

The $ 51 million generated from crypto transactions in the third quarter marked a 78% drop from the company’s record high of $ 233 million in the second quarter. Robinhood’s crypto revenue in the last quarter was bolstered by the Dogecoin Community (DOGE), with memecoin accounting for 62% of crypto revenue.

The company posted total net income of $ 365 million for the quarter, which is well below Wall Street analysts’ forecast of $ 437.1 million according to FactSet.

Robinhood said in its third quarter report that its business had been affected by several factors, including seasonality, market volatility, retail behavior and unforeseen market events. The company said the same problems could persist in the fourth quarter.

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“In the absence of any changes in the market environment or exogenous events, we believe this could result in quarterly revenues of no more than $ 325 million and annual revenues of less than $ 1.8 billion,” indicates the report.

As crypto activity declined, Vlad Tenev, CEO of Robinhood, expressed optimism for the company’s long-term prospects for digital assets, with a focus on new products and services designed for retail traders in the third quarter, such as a digital wallet which will finally allow users to withdraw and deposit cryptos to and from the platform:

“Over a million people have joined our crypto wallet waiting list to date. With 24/7 live phone support, we believe Robinhood is emerging as the most trusted platform. most reliable and intuitive for retail and crypto investors. “

“And for the future, we are committed to offering tax-efficient retirement accounts to help everyone invest for the long term,” he added.

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Related: Robinhood crypto wallet waitlist reaches 1 million people

In broader-than-crypto terms in Robinhood’s Q3 report, the company’s total net income of $ 365 million was down 35% from the previous quarter. While the company recorded a net loss of $ 1.32 billion, or $ 2.06 per diluted share, compared to a loss of $ 502 million, or $ 2.16 per share, in the second quarter.

Monthly active users also fell from 21.3 million in the second quarter to 18.9 million in the last quarter. However, Robinhood’s user base could grow in the fourth quarter, with speculation swirling around the Shiba Inu (SHIB) community that the dog-themed token may soon be listed on the platform.

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There is no evidence to confirm this however. Robinhood sent out a survey on October 23 to its clients regarding the crypto assets they have purchased in the past three months, with SHIB on the list.

According to data from CoinGecko, the price of SHIB has gained around 69% in the past seven days to settle at $ 0.00004759 at the time of writing, while assets have increased 568% over the past 30 last days.