Robinhood (HOOD) – Get Robinhood Markets, Inc. Class A Report shares extended declines Monday, pegging the stock’s six-month slump at more than 66%, even as star fund manager Cathie Wood added to her holdings in the online trading app.
Wood’s flagship ARK Innovation ETF (ARKK) – Get ARK Innovation ETF Report added around 2 million shares in Robinhood during early Friday trading, when the stock fell to a post-IPO low of $9.94 each following disappointing December quarter earnings and a weak near-term outlook.
A further 1.5 million shares were split between two other Wood-managed ETFs, taking the total purchase value to around $31.1 million, according to her website.
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Robinhood shares were marked 4.16% lower in pre-market trading Monday to indicate an opening bell price of $12.420 each.
Short interest in the stock remains elevated, as well, with recent data from S3 Partners showing bets against the group totaling $476 million, or 10.9% of the stock’s outstanding float.
Robinhood posted a steeper-than-expected fourth quarter loss of $423 million late last Thursday and said near-term revenues would come in sharply lower than Street forecasts.
Robinhood, which found itself at the center of the meme-stock controversy last year when it froze access to certain customer accounts, said March quarter revenues would fall below $340 million, likely as a result of lower equity and cryptocurrency trading volumes.
For the three months ending in December, Robinhood had a net loss of $423 million on revenues of $363 million, with compensation expenses eating into its bottom line and monthly active users falling 8% from the three months ending in September.
“Robinhood is in a transition period out of foundational infrastructure, support and reliability investments, in which the headcount doubled driven by areas such as compliance, support and engineering and entering a period of increased innovation,” said KeyBanc Capital Markets analyst Josh Beck, who carries and ‘overweight’ rating with a$15 price target on the stock.
“Trading volumes meaningfully slowed in recent months as the growth/crypto/meme craze faded, leading to a 1Q22 guidance of less than -35% year-on-year growth,” he added. “Although feel like 2022 is de-risked and on balance see more than could produce upside (e.g., growth/crypto markets bottoming, sec lending, crypto wallet) than downside (e.g., further growth/crypto retrenchement, execution delays).”
