SAN FRANCISCO — Stock trading app Robinhood reported quarterly revenue on Wednesday as pandemic trading has become an enduring hobby for many clients, but still lost money.
inside that first earnings report As a public company, Robinhood said Second-quarter revenue increased 131 percent year-over-year to $565 million.
It also lost $502 million compared to a profit of $58 million a year earlier. The company attributed a significant portion of this loss to guarantees from the emergency funding round it raised this year.
Robinhood’s CEO, Vlad Tenev, said in a statement that he was “encouraged” by the number of people trading stocks for the first time through Robinhood. The company reported 22.5 million user accounts with funds in them, up 130 percent from 9.8 million in the same period last year.
A significant portion of Robinhood’s growth in the quarter came from cryptocurrency trading after its price. bitcoin and other cryptocurrencies hit record highs in the spring. Revenue from cryptocurrency trading fees totaled $233 million, an increase of nearly 50 times from $5 million a year ago. The company said that more than 60 percent of its customers traded cryptocurrencies during the quarter, with more new customers using the app to trade cryptocurrencies rather than stocks.
Robinhood’s initial public offering It was a disappointment in July. The company’s stock started trading at $38, the bottom of a price range suggested by its bankers. Shares later fell, ending its first day down 8.4 percent.
A week later, individual stock traders began pushing the price up, mostly through options trading, a high-risk form of trading facilitated by Robinhood. Shares of the company later rose as high as $70 each.
The rally transformed Robinhood into a kind of “meme stock” that trades on momentum and sentiment rather than business fundamentals. Nothing had changed in Robinhood’s job outlook to impact the spike.
The company’s share price has since settled at around $50 per share, and the company is valued at $41.8 billion. Its shares fell more than 7 percent in after-hours trading Wednesday.
Robinhood has helped fuel meme stocks by facilitating merchants like video game retailer GameStop and movie theater chain AMC, who repeatedly raise prices from aging brick-and-mortar businesses. Robinhood’s mission to bring Wall Street style investing to the common people includes options trading and other risky bets, causing some clients to post shocking losses and draw the anger proportion of those who believe in a more traditional “buy and hold” investment strategy.
Robinhood incorporated these values into its public market debut. allocating an unusually large portion of IPO shares to retail investors app and allows clients to ask questions in investor talk and earnings calls. This month it spent $140 million to acquire Say Technologies, a company that facilitates investor Q&A sessions and proxy voting.
Yet, like many Silicon Valley companies, Robinhood has limited the rights of its shareholders by issuing multiple classes of shares. This structure gave its founders, Mr. Tenev and Baiju Bhatt, voting control over the company.
Before the company releases its results Wednesday afternoon, best shareholder questionsWith more than 900 votes, it was whether investors could buy a Robinhood hat and a “hoodie jacket.”
Robinhood’s chief financial officer, Jason Warnick, said he would look into the matter. “I love the enthusiasm of the brand,” she said.
