All articles tagged with #trading app
Google-parent Alphabet has announced that it has dissolved its stake in trading app operator Robinhood Markets, months after reducing its stake by nearly 90%. Alphabet had invested in Robinhood when it was an unlisted startup, but as economic conditions changed and the app's customer base stayed on the sidelines, its charm diminished. Robinhood recently reported lower-than-expected revenue in its third-quarter earnings report.
Google-parent Alphabet has announced that it has dissolved its stake in trading app operator Robinhood Markets. This comes after Alphabet had previously reduced its stake in the company by nearly 90%. The investment was made when Robinhood was an unlisted startup, but as economic conditions changed and the app's customer base remained on the sidelines, its appeal diminished. Robinhood recently reported lower-than-expected revenue in its third-quarter earnings report.
Robinhood's stock dropped after the trading app reported lower-than-expected revenue due to a decline in active users and muted trading activity, despite benefiting from higher interest rates. The company also announced plans to launch a brokerage in the U.K. and crypto trading in the European Union. Robinhood reported a net loss of $85 million for the third quarter, with sales rising to $467 million. While net interest revenues increased, equities-trading revenue and revenue from crypto trades declined. Monthly active users fell by 16%. The stock is still up around 20% this year, but concerns remain about the return of student-loan payments and the impact of higher interest rates.
Google-parent Alphabet has reduced its stake in trading app Robinhood by nearly 90%, cutting its exposure to the company that has been facing challenges in its main business. Alphabet had invested in Robinhood when it was a startup and held over 4.9 million shares, worth nearly $419 million at its peak. Following the sale, Alphabet now owns 612,214 shares, worth about $7 million. Robinhood has been struggling after the meme stock frenzy and the Federal Reserve's tightening cycle impacted its business. The company has been looking to expand revenue streams to counter weakness in trading.
Robinhood users who purchased put options on the now-collapsed Silicon Valley Bank and Signature Bank are unable to cash in on their profitable bets, as the trading app is not allowing them to sell their contracts or get paid. Robinhood's reasons for not letting users exercise their options are due to the logistical nightmare of buying the shares if they don't already own them to satisfy the contract. Fidelity has also faced criticism for its failure to pay up. Users are questioning why they were allowed to buy put contracts on stocks they didn't own in the first place.