Robinhood shares Swing in volatility session after missed earnings

Shares of

Robinhood Markets Inc.

HOOD 9.65%

on Friday, a day after the brokerage firm reported a loss of $423 million for the fourth quarter.

The company’s stock price fell 14% early in the session, dipping below $10 in intraday trading for the first time, before turning positive. The share price is up about 9.7%, at $12.73. It is down 28% by 2022.

The volatile session came after the company’s fourth-quarter results fell short of analysts’ expectations. Agency, used by individual investors, which recorded $363 million in revenue for the October-December period, up 14%. Analysts polled by FactSet expected quarterly revenue of $376 million and a net loss of $225 million.

For the year, Robinhood recorded an 89% jump in revenue to $1.82 billion, compared with $959 million the year before. Its total net loss was $3.7 billion for the year.

The company has increased management and technology costs that have affected its results.

Revenue tied to crypto options and trading increased in the latest quarter from a year earlier, reflecting individual investors’ willingness to take risks and more speculative trading strategies in 2021. Customer options-related revenue grew 14% to $163 million.

The company said fourth-quarter revenue related to stock trading fell 35% to $52 million from $80 million in the same quarter of 2020, the period before individual investors hit the market in October. 1 in 2021 to wage a guerrilla-style war against hedge funds.

Robinhood becomes the darling of the Covid-19 era, as millions of new investors start trading trial. The brokerage now has 22.7 million clients with funded accounts, it said on Thursday, up from 12.5 million in 2020.

The company faces stiff competition. Larger asset managers like Fidelity Investments and

Black stones Inc.

used their scale to increase profits even while cutting fees. They have also focused on adding higher-priced products.

Robinhood starts the first half of 2021 on a strong footing as millions of investors enter the market trading shares meme As if

GameStop Corp.

and cryptocurrencies like dogecoin. However, as the years went by, it was difficult to keep up the momentum. The company experienced a drop in revenue related to client trading. Revenue related to cryptocurrency trading was particularly hard hit in the third quarter. That trend continued in the fourth quarter, with crypto trading-related revenue down around 5.9% compared to the July-September period.

The recent price increase of the Shiba Inu Coin and the subsequent drop in value are part of a growing trend of memes competing with some of the largest digital tokens in the world. WSJ retail investment reporter Caitlin McCabe explains why investors are pouring money into this meme-based cryptocurrency. Photo: Amber Bragdon / Getty Images

The company said the new year offers no relief as trading continues to fall.

Robinhood said it expected first-quarter revenue of less than $340 million, a number that would represent a 35% decline from the same period last year.

Jason Warnick, Robinhood’s chief financial officer, said on a media call that trading activity has increased in recent days.

Mr. Warnick said the company is planning to launch products that focus on long-term investments. He said that the company expects to start introducing tax-friendly retirement accounts by the middle of this year and has the opportunity to expand internationally – especially in the crypto space.

This month, the company has begun rolling out crypto wallets to some customers, he said. The move allows those customers to move their crypto in and out of the Robinhood app.

Robinhood’s stock was recently penalized when investors pulled out of well-known growth companies last year. Robinhood has lost about 67% of its initial public offering price of $38 per share.

Write letter for Caitlin McCabe at

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Appears on January 28, 2022, print edition as ‘Lost Robinhood Post, Ship to Nose-Dive.’ Robinhood shares Swing in volatility session after missed earnings

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