Robinhood predicts lower sales and lower customer growth in the next quarter.
Right after the NYSE closed on Wednesday night, Robinhood is now publishing Its first quarterly report as a listed company.
The figures show that the company achieved revenues of 565 million dollars in the second quarter of this year, equivalent to five billion crowns. In advance, analysts expected a turnover of 560 million, according to CNBC. This is 100 percent more than the same period last year.
Most of Robinhood’s revenue comes from “Payment for Order Flow,” otherwise known as Payment for Order Flow (PFOF) in English. This means that Robinhood directs stock trading from a client to a market leader who is trading the stocks, and that market leader sends a sum to Robinhood in exchange for letting them perform the trade.
Order flow payments made up about 80 percent of the company’s revenue in the first quarter. The current quarterly report notes that these payments made up 80 percent of the company’s revenue in the second quarter as well.
Wall Street found the Fed’s report
Strong increase in cryptocurrency
Of the $565 million in revenue, up to $233 million came from cryptocurrency, according to the quarterly report.
That’s a sharp rise from just $5 million in the second quarter of last year. Robinhood also reported that 60 percent of the accounts on the platform traded in cryptocurrency during the second quarter.
The last three months marked the first time that a greater percentage of Robinhood clients invested more money in cryptocurrencies than stocks, according to the quarterly report.
Cryptocurrency trading in the second quarter can be seen tied to bitcoin, which reached its historic peak in mid-April. At the time, one bitcoin was worth over $63,000. Today, the value is down to 45,000.
Loses money, but significantly increases the customer base
The latest numbers from Robinhood also show that the company lost $2.16 per share in the second quarter. It’s more within the expected range, according to CNBC.
In the aftermarket, Robinhood’s stake is down about four percent.
In the first quarter of this year, Robinhood lost 23 cents per share, according to information the company released in connection with the listing.
One figure that may be noteworthy for investors is the number of accounts with money on ledger that the company manages. In the first quarter of this year, the company had 18.0 million funded accounts.
Today’s quarterly report shows that the company now has 22.5 million accounts. This represents a growth of more than 20 percent.
Now, however, Robinhood expects lower growth in the future. With seasonal changes leading to headwinds and less activity across the industry, the company expects lower fund turnover and significantly fewer new money in the following quarter, they themselves write in the quarterly report.
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Robinhood descends from the dramatic climax
The online trading platform had a wild start on the stock exchange. After going public on July 29 at an issue price of $38, the stock was down nearly 10 percent on the first day.
But the following week, the share rose sharply, with individual jumps of 20 and 50 percent in just a few days. In the middle of the week, the stock price has doubled since the company went public.
Then, on the other hand, the stock fell sharply. A quarter of the value was shaved off in one day.
Robinhood’s share price is now around $50, which despite falling from the top is still well above its starting price of $38.
Sharp jumps up and down can be a shot in the foot for Robinhood’s stock, according to analyst John Heagerty at Atlantic Equities.
It is not normal for a stock of this size to move so quickly. Hegerty says, I think that will deter institutional investors CNBC. He himself has a buy recommendation for the stock and a target price of $65.
Robinhood was also heavily involved in the drama on Gamestop stock earlier this year.
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