TL: DR Breakdown
- The Robinhood stocks plunge as crypto market activity decreases with more accounts leaving the platform.
- Not listing Shiba Inu could be a contributor to its net losses this quarter.
The crypto activity on Robinhood has seen a drop, consequently leading to its stock HOOD declining in value. As per the platform’s report on October 26, its stocks saw approximately a 10% plunge. Moreover, its quarterly profits also dropped from the last quarter to under $300 million. The overnight decline is closing the online marketplace’s year at a low.
At the beginning of the year, Robinhood played a significant role in boosting Gamestop and AMC trades. Furthermore, it received a lot of criticism following its delisting of Gamestop as an inconvenient product on its platform. Traders conducted a social media uprising to improve and support Gamestop and AMC’s worth.
However, Robinhood’s CEO tried to clear the platform’s name during court proceedings. Furthermore, it went ahead to apologize to its customers for its actions and terminating Gamestop’s trade on its platform.
A tough month for Robinhood
According to the platform’s report, it received over $500 million in the last quarter. In its 3rd quarter report, Robinhood expressed several factors that influenced its markets. Among them were its customers’ behaviour, unexpected events in the market, volatility, to mention but a few. It also stated that its growth curves also depend on these factors from the word go.
According to its Tuesday publishing, the platform aired that the same factors might play a part in its proceedings this quarter. However, CEO Vladimir Tenev maintains that the future is bright for Robinhood as its primary focus remains on its long-term objectives. Additionally, it wishes to expand its crypto services to attract more users to its platform while supporting the booming economy.
A couple of analysts believe that the platform might have experienced a downward curve due to its lack of introducing the Shiba Inu coin. Shiba Inu is a meme coin that has received a lot of hype lately, contributing to its continued price spikes.
Accounts leaving the platform
Contrary to earlier expectations, the platform is experiencing a decline in accounts. Previous analyses expected a boost to over 24 million accounts. However, Robinhood is dealing with over 100 000 accounts leaving the platform. This factor is a vital pain point in its net losses this quarter.
It boasted an increase of 10 million accounts in the first half of the year. It reflected in its increments to over $500 million, which registers higher than what the general US markets expected. Even with the current losses, HOOD is trading above the initial thoughts of many.
After all, it experienced a slight increase after its plunge on Tuesday and may recover if factors suit this purpose. All the same, it has to deal with its issues with the SEC, which suspects the platform is reaping off its retail traders. In a way, it might also be a reason for the current issues that Robinhood is experiencing.