Category: HOOD

HOOD – Robinhood To Give Cash To New Clients

Robinhood, the low-cost brokerage some critics say has gamified stock trading so much that new investors may not realize they’re risking losing real money, has scheduled what the company is calling a “$100,000 summer giveaway sweepstakes” to attract new clients, according to an announcement.

Participants in the program don’t have to join Robinhood or use its services to qualify as contenders for one of 200 $500 prizes. They need only to apply for Robinhood brokerage accounts and link their bank accounts to Robinhood or refer someone else who applies successfully for a Robinhood account and links a bank account, the announcement stated.

Winners will be notified by Sept. 16, according to the announcement. They will then have 30 days to claim their cash rewards. They can invest the funds immediately or withdraw them as cash after 30 days.

Robinhood’s new promotional campaign comes less than after a week after the company released its first set of second fiscal quarter financial results since going public.

Read more: Robinhood Says More Than 60 Pct Of Funded Accounts Traded Crypto

Net cumulative funded accounts grew to 22.5 million from 9.8 million a year ago. Assets under custody grew to $102 billion year over year from $33 billion. Monthly active users increased to 21.3 million from 10.2 million a year ago. Total net revenue increased to $565 million from $560 million expected.

Crypto-related revenues surged to $233 million of the total $451 million in the transaction-related top line, a marked increase from the $5 million in crypto transaction-related sales seen a year ago.

The company warned that moving ahead, “for the three months ended September 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter.”



 About: In spite of their price volatility and regulatory uncertainty, new PYMNTS research shows that 58 percent of multinational firms are already using at least one form of cryptocurrency — especially when moving funds across borders. The new Cryptocurrency, Blockchain and Global Business survey, a PYMNTS and Circle collaboration, polls 500 executives looks at the potential and the pitfalls facing crypto as it moves into the financial mainstream.

HOOD – Robinhood Shares: $65.35 Target From Redburn

  • The shares of Robinhood Markets Inc (NASDAQ: HOOD) have received a price target of $65.35. These are the details.

The shares of Robinhood Markets Inc (NASDAQ: HOOD) have received a price target of $65.35. And Redburn analyst Charles Bendit initiated coverage of Robinhood with a “Buy” rating.

“Robinhood has had a profound impact on the construct of the brokerage market in the US,” wrote Bendit in a research report via The Street. “It continues to enlarge its defined market and is geared into the increasing wealth of its users, a generation whose share of US wealth is projected to triple by 2030.”

Along with the expansion and crypto trading, Bendit expects Robinhood to move into adjacent consumer finance areas and export its model to overseas regions ripe for disruption. Plus Bendit added that if Robinhood is valued in line with other disruptive fintechs companies and if it is also able to capture a 1% share of global neobanking revenues in 2023, there could be a fair value of $97.42.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

HOOD – Why Robinhood Stock Plunged Today

What happened

Shares of Robinhood Markets (NASDAQ:HOOD) fell 10.3% on Thursday after the online brokerage released its second-quarter financial results and alerted shareholders to a slowdown in trading activity.  

So what

Robinhood’s revenue soared 131% year over year to $565 million. The gains were driven by a surge in cryptocurrency-related transaction revenue to $233 million, up from only $5 million in the year-ago quarter.

Traders have flocked to Robinhood’s platform over the past year. Monthly active users jumped 109% to 21.3 million. Its assets under custody, in turn, increased 205% to $102 billion.

“We’re encouraged by the number of people who are accessing the financial system for the first time through Robinhood,” CEO Vlad Tenev said in a press release. “We’re happy to expand access through products like commission-free crypto trading, which saw strong growth this quarter.”

To better serve its rapidly expanding customer base, Robinhood ramped up its investments in technology and customer support. This spending weighed on profits, but its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) still managed to increase by 43% to $63 million.

A person is pointing to a stock chart that rises sharply and then falls.

Investors sold off shares of Robinhood on fears of slowing growth. Image source: Getty Images.

Now what 

Unfortunately, management warned that Robinhood’s results in the current quarter are unlikely to be as strong. The brokerage’s trading volumes and transaction revenue are heavily influenced by market volatility and investor trading behavior. These factors — including the meme-stock frenzy and the soaring popularity of cryptocurrencies like Dogecoin (CRYPTO:DOGE) — helped to fuel Robinhood’s growth earlier this year. But with these trends now abating, the company told investors to expect “lower revenues and considerably fewer new funded accounts” in the third quarter.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

HOOD – Is anyone actually trading stocks on Robinhood?

So, is anyone actually trading stocks on the world’s largest stocks trading app?

A quick glance at Robinhood Markets Inc’s (NASDAQ:HOOD) second quarter numbers reveal why I pose this question.

Of the US$451mln of transaction-based revenues generated in the three months ended June 30, US$233mln came from buying and selling cryptocurrencies on customers’ behalf. That’s 51% of the total.

A further US$165mln, or 36%, came from options trading activity.

It generated just US$52mln from plain vanilla equities, which is 11.5% of transaction-based revenues.

The superficial story is one of changing tastes among American investors with the millennials and Gen Zs eschewing former 401k staples such as GE and GM for the lure of gravity-defying alternatives to fiat currencies.

However, you scrape the surface and you realise that with crypto comes volatility, particularly if your fortunes are aligned to one of the more marginal names.

Thus, it was and is for Robinhood, which was forced to accompany a good news story of a year-on-year doubling in revenues with a warning – and one that wiped as much US$7bn from the value of the business on a turbulent day of trading Wednesday.

The issue was Dogecoin, the meme-inspired electronic currency, that was responsible for 34% of all crypto traded on the platform.

“If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected,” Robinhood said in a statement to the market.

That’s a big ouch.

Not just that, it may reveal a fundamental flaw in the business model.

Success for Robinhood most likely relies on it attracting stable, long-term investors (rather than day traders and stock market ‘gamers’).

Yet the gamers and the traders seem to be the people that are currently in the ascendant.

A vox pop by the Financial Times elicited the following comments that sum up the way the new generation of investors view the app.  

“The money I have on Robinhood I view as ‘whatever happens, happens’,” said Nick Hogan, a Los Angeles entertainment manager who has long traded on Robinhood. “If [my investment] crashes, it doesn’t affect me that much. It’s like money you would use at a casino.”

A reset of the American stock and crypto markets that leads to wholesale losses may change that mentality.

It may also act as an arrow to the rump (if not the heart) of Robinhood.

In other words, there are some painful times ahead of both the users of and investors in the app – particularly at the current heady valuations.

HOOD – My Top Robinhood Stock to Buy Right Now

Demographics released about investors who use the Robinhood trading platform show that they tend to be younger, which suggests they have several decades before reaching retirement. That can have some influence on the stocks they decide to favor as investments.

And while the meme stock craze has dazzled some retail traders (including some Robinhood users) with the idea of instant riches, a long-term investment strategy is more likely to be rewarding for your average retail investor. That too can be influential in deciding the best stocks to pick for a portfolio.

Taking all this together, popular Robinhood stock Tesla (NASDAQ:TSLA) looks like it could be a smart investment, especially for younger investors. Here’s why.

Investor reviewing financial charts.

Image source: Getty Images.

Tesla’s present

The future of automobiles is undeniably on a path toward electric. And Tesla, a company that didn’t exist two decades ago, is the clear front-runner in the emerging electric vehicle (EV) industry. CEO Elon Musk’s focus on manufacturing efficiency is paying off: Tesla posted an industry-leading operating margin of 6.3% in 2020 while capturing an industry-best 16% of the EV market.

I believe the company can maintain that momentum. Unlike most rivals, Tesla was designed from the ground up for EVs, meaning it doesn’t have to overhaul factories intended for internal combustion engines. By comparison, General Motors (NYSE:GM), which plans to be all-electric by 2035, has 122 factories across the U.S., and only a few build EVs. That means the company will need to invest billions to retool existing infrastructure.

In short, Tesla has a considerable cost advantage. But that’s just the tip of the iceberg. In 2017, the company started making its 2170 battery cell. At the time, Musk called it the “highest energy-density cell in the world and also the cheapest.” Current estimates put Tesla’s cost at $142 per kilowatt-hour (kWh), 16% lower than those of its next closest competitor, which happens to be (you guessed it) General Motors.

And last September, Tesla delivered another blow to legacy automakers when it unveiled a new battery cell, the 4680. This innovation will cut costs by another 56%, boost the range by 54%, and reduce capital expenditure by 69%, according to management.

But there’s still one more piece to the puzzle.

Tesla is more than an automaker; it’s an artificial intelligence (AI) company. Today, it has over 1 million autopilot-equipped EVs on the road, all of which feed data to the AI models that power its self-driving software. Moreover, the company’s in-car supercomputer is estimated to be some six years ahead of its rivals’. In short, Tesla has more data and better tech, both of which give the company an edge.

Putting all the pieces together, Musk believes the company will release a fully autonomous $25,000 EV in the next three years. No other automaker is anywhere close to that.

Tesla Roadster parked in front of a house at twilight.

Image source: Tesla

Tesla’s future

Now the story gets interesting. Once Tesla has a self-driving EV, the company plans to launch an autonomous ride-hailing network. In fact, management at investment firm ARK Invest said it believes there is a 50% chance that Tesla will accomplish this by 2025. If that happens, ARK puts the market opportunity at $1.2 trillion by 2030. And given its clear advantage, Tesla is well-positioned to take the lion’s share of that sum.

After that, the story turns into science fiction. Morgan Stanley analyst Adam Jonas recently made a bold prediction: Tesla will launch a flying-car business by 2050. That’s right: a flying car business. And by that time, Jonas believes Tesla’s addressable market will reach $9 trillion. Of course, this is pure speculation right now. But Tesla is clearly an innovative company, and I wouldn’t be surprised to see its stylized “T” on a flying car in three decades.

Is Tesla a sure thing? Of course not. Nothing is guaranteed when it comes to picking stocks. And Tesla currently trades at an absurd valuation compared to its peers. But if you’re a young investor with decades before retirement, I think adding a few shares of Tesla to your portfolio makes a lot of sense.

A word of caution

On Aug. 16, the National Highway Traffic Safety Administration announced an investigation of Tesla’s autopilot system. Specifically, the agency is concerned by several incidents in which Teslas (using autopilot or cruise control) have collided with emergency vehicles.

While this certainly isn’t good news, I don’t think long-term investors should be overly concerned. Tesla’s autopilot and full self-driving software are still in development, but eventually, these systems could be safer than human drivers. In fact, Elon Musk made the following comment during the most recent earnings call: “Autonomy will become so safe that it will be unsafe to manually operate the car, relatively speaking.”

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

HOOD – Robinhood earnings show a company reliant on quieting retail traders and volatile crypto pricing

Stocks? Where Robinhood

is going, it doesn’t need stocks.

When the company went public in July, it made no bones that it is a company built on growth assumptions and waist-deep in the world of cryptocurrency trading.

On Wednesday, the $41 billion no-fee trading platform disclosed its first-ever quarterly earnings report and confirmed that, for better or for worse, both of those things remain true — and also that it will more than likely get worse before it gets better.

Robinhood’s revenue from crypto transactions for the quarter was $233 million, making up just over half of its total revenue of $565 million for the June-ending period. That year-over-year growth is staggering considering that Robinhood said it made $5 million from crypto transactions in the second quarter of 2020, and the highly volatile sector now a plays a key role in the company’s future.

The company also disclosed that 60% of its 22.5 million net cumulative funded accounts traded crypto in the quarter.

Considering that Robinhood alerted investors to the fact that 34% of its crypto-trading revenue for the first three months of the year came from Dogecoin, which is up almost 6,200% in 2021 thanks in large parts to Elon Musk’s tweets, that volatility can be extrapolated even further.

But one thing that could tamp down another wild quarter for Robinhood is that fewer people will likely be using it.

On a call with analysts Wednesday, Robinhood Chief Financial Officer Jason Warnick was clear that the fall will not be as profitable as the winter or the summer months, and that investors should assume lower trading volumes and revenue for the third quarter.

Robinhood, which is still smarting reputationally among retail traders from its January decision to halt trading on meme stocks like GameStop

and AMC Entertainment

and the height of their short squeezes, fell almost by as much as 9% in after-hours trading.

But despite reporting a topsy-turvy first public quarter, CEO Vlad Tenev cut an optimistic tone on the call with investors and analysts, speaking broadly about his startup’s plans to create digital wallets, manage IRA accounts for users and even expand internationally.

He even made a nod to the retail trading “Apes” on Reddit.

While answering a question about Robinhood’s plans to sell IPO shares of new public companies on the platform, Tenev made a clear point of using meme-stock lingo, telling those on the call that retail investors buying IPO stocks have proven to be “relatively diamond-handed.”

HOOD – Robinhood signals trading slowdown despite strong second quarter boosted by crypto

Robinhood is bracing for a slowdown despite reporting strong second quarter earnings on Wednesday. 

The commission-free trading app, which rose to popularity earlier this year as a result of the trading frenzy related to meme stocks like GameStop and AMC, posted a net loss of $502 million, or $2.16 per diluted share compared with a net income of $58 million, or $0.09 per diluted share, a year ago. Total net revenues surged 131% to $565 million, compared to $244 million during the same period a year ago. 

Transaction-based revenues jumped 141% to $451 million, compared to $187 million a year ago. Options revenue increased 48% to $165 million, up from $111 million a year ago, while cryptocurrency revenue rose to $233 million, compared to $5 million a year ago. Meanwhile, equities transaction-based revenue decreased 26% to $52 million, compared with $71 million a year ago. 

Ticker Security Last Change Change %
HOOD ROBINHOOD MARKETS, INC. 49.80 +3.13 +6.71%


According to the company, over 60% of its funded accounts placed their first trade in cryptocurrencies rather than equities. Approximately 59% of funded accounts traded equities, down from 66% a year ago. 

The company’s net cumulative funded accounts grew 130% in the second quarter to a total of 22.5 million, up from 9.8 million a year ago. Monthly active users increased 109% to 21.3 million, up from 10.2 million a year ago. Average revenue per user was $112 in the second quarter, compared to $115 a year ago, and Robinhood now boasts $102 billion in total assets under custody, up 205% from $33 billion a year ago.  

While Robinhood supports a portfolio of seven cryptocurrencies, approximately 62% of its cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, compared to 34% in the previous quarter.

“If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected,” the company warned in a 10Q filing

Vladimir Tenev said he wants the introduction of digital crypto wallets to be “done correctly and properly.” (Noam Galai/Getty Images for TechCrunch)


Although Robinhood did not offer full-year guidance, the company anticipates “seasonal headwinds and lower trading activity” will result in lower revenue and considerably fewer new funded accounts in the third quarter. 

Going forward, Robinhood expects to become less reliant on payment for order flow. In the second quarter, payment for order flow for equities and options as a percentage of revenue declined to 38% from 64% in the previous quarter.

“As customer interest in crypto increased, we expect the makeup of revenue to continue to fluctuate and payment for order flow in the near term may again increase,” Robinhood Chief Financial Officer Jason Warnick told analysts and retail investors on the company’s earnings call. “But over the long run, the trend should be continued.”


When it comes to introducing digital wallets to deposit and withdraw cryptocurrencies, executives acknowledged that it is a “key priority” but “tricky to do with scale.”

“We want to make sure it’s done correctly and properly, and we want to make sure that everything from a security and operations standpoint is as bulletproof as possible because our top value is safety first and we hold ourselves to a very high standard for that,” Robinhood co-founder and CEO Vlad Tenev said. “So I think, as with all these things, we want to make sure it’s right.” 

The company is also exploring giving customers access to tax-advantaged accounts, such as IRAs and Roth IRAs, as well as joint accounts and beneficiaries. However, executives emphasized that any related announcements will not be made for the foreseeable future.

In addition, executives said that a dividend payment to shareholders is unlikely for the foreseeable future as the company remains in a “growth stage.”

Shares of Robinhood have fallen more than 8% in after-hours trading following the earnings results. 

HOOD – Robinhood's shareholders: are crypto wallets coming and do we get hoodies?

Robinhood logo is seen on a smartphone in front of a displayed stock graph in this illustration taken, July 2, 2021. REUTERS/Dado Ruvic/Illustration

NEW YORK, Aug 17 (Reuters) – When Robinhood Markets Inc (HOOD.O) reports quarterly financial results on Wednesday for the first time since going public, its retail shareholders want to know when cryptocurrency wallets are coming and whether they will get branded hoodies, according to Say Technologies.

Robinhood, which said it reserved up to 35% of the shares in its July 29 market debut for its users, announced last week it was buying Say, a platform that crowdsources questions from retail investors and allows them to interact with companies they invest in during events like earnings calls.

On Tuesday afternoon, the top question on Say for Robinhood, with 1.6 thousand votes, was whether the brokerage was getting a crypto wallet, which would allow users to withdraw and transfer cryptocurrencies to and from other brokerages.

Cryptocurrency trading has fueled a large part of Robinhood’s recent growth, with more than 9.5 million customers trading about $88 billion of cryptocurrency on the platform in the first quarter, according to a recent regulatory filing. Crypto assets have grown 23-fold between March 31, 2020 and the end of this year’s first quarter, the filing said.

The second question was on Robinhood’s plans to launch the app in other countries, while the third asked if the company would allow users to name beneficiaries or adopt features such as multiple accounts and joint accounts.

Running a close fourth: “as initial investor, can we get a robinhood hat and hoody jacket?”

The company expects to report revenue of between $546 million and $574 million for the three months ended June 30, versus $244 million a year earlier, according to an updated filing.

The gain was driven largely by an increase in funded accounts, as well as higher options and cryptocurrency trading levels, offset by a decrease in equities trading, Robinhood said.

Reporting by John McCrank; Editing by Ira Iosebashvili and Steve Orlofsky

Our Standards: The Thomson Reuters Trust Principles.

HOOD – Robinhood gets boost as Congress declines ban – for now – on sales tactic

Robinhood dodged a major blow to its business model following a vote by the House Financial Services Committee that resulted in the quiet shelving of an initial legislative effort to ban a practice known as “payment for order flow,” FOX Business has learned.   

Payment for order flow (PFOF) is a practice in which discount brokers sell their customers’ buy and sell orders to third-party brokerages like Citadel and Virtu Financial. It allows firms like Robinhood, Charles Schwab Co., and ETrade to offer commission-free or low-fee trading to investors. 

But the practice is not without its critics, including Gary Gensler, chairman of the Securities and Exchange Commission, who has said PFOF could lead to abuses such as not providing customers with the best price execution. 

FILE: An electronic screen at Nasdaq displays Robinhood in New York’s Times Square following the company’s IPO, Thursday, July 29, 2021. (AP)

The House Financial Services Committee, led by Chairwoman Maxine Waters, D-Calif., launched its own inquiry earlier in the year and, according to people familiar with the matter, some of its ranking members had pushed for a ban of PFOF.  


But the legislation that the committee passed on July 30, introduced by Rep. Brad Sherman, D-Calif., fell far short of a ban. It simply directs the Securities and Exchange Commission to”study” and “consider” banning or limiting PFOF. 

The bill also directs the SEC to look at conflicts of interest based on PFOF arrangements and the impact of PFOF on the quality of order execution. 

According to the language in the latest bill, the SEC has exactly 180 days to report all their findings from the so-called “study” to Congress. The SEC then has 18 months to “revise its rules consistent with such study, including, if warranted to prohibit or limit the payment for order flow.” The bill goes on to say the SEC may end the study early and issue rules to limit, regulate or prohibit payment for order flow if the Commission finds such a rule necessary in the public interest for the protection of investors. 

In other words, the ban is not off the table… yet. 

The move by the committee to study PFOF came after lobbying by Robinhood and other Wall Street firms. They provided committee members with evidence that trading has never been cheaper and more democratized since discount brokers have engaged with third-party brokers to sell their order flow, according to people with knowledge of the matter.  


While the final committee bill has received some coverage, details of the bill, including committee members opting for a study as opposed to an outright ban amid the lobbying, have yet to be reported.  

Shares of Robinhood popped more than 5% when FOX Business first aired these details on Friday. 

A Robinhood spokesman had no comment. Press officials for the SEC and the Financial Services Committee didn’t return calls for comment. 

The lobbying underscored how underserved communities – middle-class people of all races – and a new generation of millennial investors are now trading stocks and benefiting from stock market gains that traditionally had been reaped by the richest Americans, people familiar with the matter say. 

The pushback from Robinhood forced GOP committee members and moderate Democrats to embrace the watered-down bill, these people say, and the resulting legislation shows that any attempt by Gensler to push for major changes in PFOF would likely face congressional resistance.  

It’s also unclear if House Speaker Nancy Pelosi, D-Calif., will even introduce the legislation to the full House, the sources added. 

Investors believe that’s great news for Robinhood, the upstart no-fee brokerage firm and app that just became a public company last month. Many discount brokers like Schwab have diversified business models but Robinhood’s business relies on trading more than other discount firms. 


PFOF was responsible for a whopping 81% of Robinhood’s total revenue in the first quarter of this year. 

In fact, fears of a PFOF ban dampened appetite for Robinhood’s IPO among large, institutional investors, FOX Business has reported. 

Democrats on the House Financial Services Committee have been eyeing a ban on PFOF since the historic meme stock frenzy in January, and after criticism by Gensler. 

At the time, Gensler said PFOF could create conflicts of interest for customers and brokerages. Firms like Robinhood might be incentivized to send order flow to third-party brokers based on a business relationship rather than best execution. 

Brokerages, meanwhile, could gain an information advantage in trading knowing where retail order flow is headed. 

For these reasons, PFOF is currently banned in the United Kingdom and Canada; Gensler said the SEC would study whether similar bans could be applied in U.S. markets.   

Robinhood and the third-party brokers deny those allegations and at least initially those denials were mostly ignored. 

According to an initial draft of the House bill, an amendment to the Securities Act of 1933 would not make it “unlawful to solicit, receive or provide payment for order flow (as such term is defined under section 240.10b-10(d)(8) of title 17, Code of Federal Regulations, on the date of enactment of this subsection) that consists of a monetary payment, service, property, or other benefit that results in remuneration, compensation, or consideration to a broker or dealer…”  

Sherman, who also introduced the bill in its current form, has been a vocal skeptic of the PFOF model. In February, during hearings on the practices, he attacked Citadel Securities chief Ken Griffin, alleging that PFOF somehow hides true costs of trading to retail investors.  

Griffin’s firm is one of the largest PFOF providers. During the heated exchange, he countered that the practice has saved retail investors billions of dollars over the years in contrast to other execution strategies, an argument that ultimately resonated with most members of the committee and resulted in the proposed legislation falling far short of a ban. 

A media official for Sherman didn’t return calls for comment. 

In December of 2020, the SEC reached a settlement with Robinhood, which paid $65 million for allegedly misleading investors about how it makes its money through PFOF. The company neither admitted nor denied wrongdoing. The SEC alleged customers lost millions by trading on Robinhood instead of with other brokers who could have given them better prices.   

With a ban of PFOF off the table, at least for now, shares of Robinhood have recovered from their initial offering price of $38 to close over $50 on Friday. Traders interviewed by FOX Business say they doubt Gensler will spend valuable political capital seeking a ban through a vote of the full commission that would upset his relationship with Congress. 


“I say good luck with that one,” said Teddy Weisberg, founder of Seaport Securities. “It will be very hard or impossible to stuff that genie back into the bottle.” 

HOOD – Expect Robinhood Stock to Stay Volatile. The Battle Is Being Fought in the Options Market.

Robinhood Markets got over its weak market debut, and in a hurry.

In its first full week of trading, the stock jumped 57%, to $55.01, well above its initial public offering price of $38. The surge came on very little news. The information that did come out was mixed: Fund manager Cathie Wood’s ARK Investments bought the stock, but some early investors also indicated they could now sell shares in the months ahead.