Robinhood Market Shares Slide After High-Flying Year
Robinhood Markets' shares fell nearly 11% after incentives to attract customer assets impacted third-quarter results, decreasing net revenue by $27 million. Despite a 120% surge earlier this year, profits were below market expectations. Analysts noted seasonal deceleration but commended cost-cutting efforts.
Shares of Robinhood Markets took a steep dive, dropping nearly 11% before market opening on Thursday. This decline comes as a surprise after the company more than doubled its value in the past year.
Chief Financial Officer Jason Warnick attributed this setback to incentives designed to draw in customer assets, which cut the retail trading platform's third-quarter net revenue by $27 million. Despite the dip, Robinhood has made efforts to diversify its services, launching a desktop trading platform and new trading options in recent months.
At the close of trading on Thursday, shares were valued at $25.23. Analysts from J.P. Morgan viewed this quarter as a seasonal slowdown following a strong start to the year and noted the significant, negative reaction from the stock market. They also commended Robinhood for its cost discipline, as the company's operating expenses decreased by 10% during the quarter.
(With inputs from agencies.)