Robinhood stock plunges 10% after the company’s cryptocurrency revenues plummeted in the third quarter of the year

Robinhood (HOOD) stocks fell sharply following the company’s third quarter results, which recorded lower than expected cryptocurrency transaction income.

The popular retail company released its third quarter report on October 26th, and Cryptocurrencies accounted for $ 51 million, or 19%, of the total of $ 267 million in transaction-based revenue for the quarter.

The release of the report on Tuesday coincided with HOOD’s roughly 10% decline to $ 35.70, but the price has risen 1.9% since then Settled at $ 36.40 at the time of writing.

Robinhood stock plunges 10% after the company’s cryptocurrency revenues plummeted in the third quarter of the year
Robinhood stock plunges 10% after the company’s cryptocurrency revenues plummeted in the third quarter of the year

The $ 51 million generated from cryptocurrency transactions in the third quarter was a 78% decrease from the company’s record of $ 233 million in the second quarter of the year. Robinhood’s cryptocurrency sales last quarter were supported by the Dogecoin (DOGE) community as Memecoin accounted for a whopping 62% of cryptocurrency sales.

The company posted net income for the quarter totaling $ 365 millionwhich, according to FactSet, was well below Wall Street analysts’ forecast of $ 437.1 million.

Robinhood stated in its report for the third quarter of the year that their business had been influenced by several factors including seasonality, market volatility, retail behavior and unforeseen market events. The company said the same issues could continue into the fourth quarter.

“In the absence of changes in the market environment or exogenous events, we believe this may result in no more than $ 325 million in quarterly sales and less than $ 1.8 billion in total annual sales.” it says in the report.

While cryptocurrency activity declined, Vlad Tenev, the CEO of Robinhood, outlined his optimism for the company’s long-term prospects for digital assets, as in the third quarter highlighted new products and services developed for retailers such as: B. a digital wallet that finally enables users to withdraw and deposit cryptocurrencies on and off the platform:

“To date, over a million people have signed up for our crypto wallet waiting list. With 24/7 live phone support, we believe Robinhood will become the most trusted and intuitive platform for private and cryptocurrency investors.”

“And in the future we aim to offer tax-privileged retirement accounts that help everyone to invest in the long term.”, he added.

Generally speaking, in Robinhood’s third quarter report, The company’s total net income of $ 365 million was a 35% decrease from the previous quarter. The company recorded a net loss of $ 1.32 billion, or $ 2.06 per diluted share, compared to a loss of $ 502 million, or $ 2.16 per share, for the second quarter.

The monthly active users also fell from 21.3 million in the second quarter to 18.9 million in the last quarter. Nevertheless, Robinhood’s user base could increase in the fourth quarter amid speculation that the Shiba Inu Community (SHIB) could soon be listed on the platform.

However, there is no evidence to confirm this. Robinhood sent out a survey to their customers on October 23rd about the crypto assets they’ve bought in the past three months, and SHIB was on the list.

According to CoinGecko data, The SHIB price is up about 69% in the past seven days to $ 0.00004759 at the time of this writing while Assets are up a whopping 568% in the past 30 days.

Similar Posts