Nothing to do for Robinhood, the trading APP that has become its own shadow, compared to the resounding success he had known in early 2021 when, in the midst of wild trading exploded on meme stocks of the caliber of GameStop e AMC Entertainment had attracted the attention, above all, of Millennials and Generation Z.
The Covid-19 pandemic had created fertile ground for the APP, leading several amateur traders, especially young ones, to give themselves up to trading. Then the IPO in July 2021 and, since then, the gradual decline of success, with the title now being traded down by over -70% compared to the placement price of $ 38 with which he landed on Wall Street.
Since the start of the year quotes have lost 49% also in the wake of several downgrades, among which Goldman Sachs has recently stood out, and today they mark a new drop of more than -10%, discounting the disappointing numbers in the balance sheet.
In fact, the results for the first quarter of 2022 released yesterday, after the end of the trading day on Wall Street, confirmed the fear of the fintech group’s loss of popularity.
The turnover, in particular, plummeted 43% yoy to $ 299 million, worse than the expected $ 355 million, largely on the back of Robinhood’s customer-launched transaction revenue plummeting -48% to $ 218 million.
A Street.com article highlights how surprising it is that the incidence of revenue related to trading on total turnover dropped from 80.46% last year to 72.9%, confirming how the volume of trading operations initiated on the platform has dropped considerably.
In particular, transactions involving options they fell 36% year-on-year, to $ 127 million.
The turnover linked to cryptocurrency trading dropped 39% to $ 54 million, while revenue from the equity trading division fell by as much as 73%again on an annual basis, to $ 36 million.
Turning to earnings, these were not received, meaning that the fintech company ended the first quarter with a loss per share of 45 cents, higher than the liabilities of 38 cents per share expected by the consensus.
In the first quarter of 2021, Robinhood reported a loss of $ 6.26 per share, on revenue that was much higher than the one just disclosed, however, of $ 522 million (now it is at $ 299 million).
Other numbers that confirm the crisis of the APP:
in the first quarter of 2021, supported by subscribed to the Reddit forum having launched a buy charge on the Gamestop title, Robinhood had seen a growth in its accounts of 5.5 million units. This year, the number of users increased by just 100,000 on a net basis, bringing the total to 22.8 million.
Luck has definitely turned its back to the trading APP, which has come to be almost mythicized among retail investors, eager to launch into trading of shares and cryptocurrencies, also to pass the time, given the lockdowns launched also in 2021 in various countries in order to stem Covid infections .
Lockdowns and various stay-at-home-style restrictions had forced it real traders and aspiring to stay at home.
The reopening of the economies, however, has led them to leave their homes and to renounce passions obviously, and in some cases, temporary, born during the pandemic
From the financial statements just released, it emerged that, in the first quarter of 2022, the number of monthly active users (MAU) actually dropped by 10% to 15.9 million, from 17.7 million in the first three months of 2021 “during which – reads the company’s press release – we had witnessed high trading volumes and account registration, as well as high market volatility, especially in some sectors “.
A few days ago Robinhood announced a plan to lay off 9% of its workforce in the midst of the perfect storm that has been hitting the title for months.
The announcement came through the voice of the CEO Vlad Tenev, which motivated the decision with the presence of “duplicate roles and job duties” and therefore with the need to streamline the staff.
On December 31, Robinhood had indicated a workforce composed of 3,800 full-time employees.