Robinhood Announces Increased Revenue and $1.4 Billion Loss

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But the company’s shareholders adhered to it. Two rounds up in one week emergency fund A total of $4.4 billion to meet credit requirements for stock trades and continue trading. This funding caused Robinhood to suffer heavily in the first three months of the year.

Robinhood drew scrutiny from regulators long before the GameStop craze caught national attention. In 2018, it announced it would offer checking and savings accounts, claiming it was already backed by the Securities Investor Protection Corporation, a consumer protection group that oversees brokerage firms. After the group said it did not insure its checking and savings accounts, Robinhood backed off and launched the service a year later.

Last year, Robinhood was fined $65 million by the Securities and Exchange Commission. accusation of misleading customers about how he makes money. And in recent months, Massachusetts has escalated a fight against the practice, moving to revoke its license in the state, and echoing other complaints that its users are encouraging inexperienced investors to make risky bets.

The company also suffered cuts at key moments, including March last year when the pandemic hit and stocks went into free fall.

Robinhood outlined regulatory scrutiny as a risk factor in its prospectus. He said that given the highly regulated nature of the industries in which we operate, it is expected to be subject to investigations, actions and agreements in the future.

Robinhood also drew attention to class action lawsuits related to blackouts, securities fraud, hacking and trading halts this year. The company was sued by the family of Alex Kearns, a customer who died by suicide last year after making risky transactions on Robinhood’s app.

“This is a company that flies super fast in a truly regulated environment,” Mr Haslett said.

Another risk is the drop in demand, Robinhood said. dogecoinis a joke cryptocurrency based on a meme about a Shiba Inu dog. The company said that in the first three months of the year, one-third of revenue from cryptocurrency trading came from Dogecoin.

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