Robinhood Stock Whipsaws Amid Market Volatility
Shares of Robinhood Markets (HOOD) – Get Robinhood Markets, Inc. Class A Report slipped to a low of $20.58 on Monday amid declining user growth coupled with omicron related volatility in the markets.
Robinhood has gained 15.25% since Monday’s low and closed Wednesday at $23.72. But that’s still a 38% decline from its IPO price of $38 a share.
The stock has dropped 72% in value from its intraday high of $85 reached earlier this year.
In October, Robinhood posted a wider-than-expected third quarter loss as the company saw fewer new accounts amid a slowdown in activity related to cryptocurrencies.
Robinhood, which went public in July, was at the heart of so-called meme stock mania at the beginning of the year. The company’s trading platform was used by retail options traders who heavily shorted names promoted online in attempts to coordinate short squeezes.
Recently, the company disclosed a hack that exposed the personal information of millions of users.
Hackers were able to access the emails of five million customers, the full names of two million customers, and around 300 zip codes and birthdates. They also gained access to around 4,400 phone numbers.
The company said it now expects newly funded accounts for the fourth quarter to be roughly in line with the 660,000 opened in the third quarter of 2021. Robinhood has over 22 million customers with funded accounts.
The Securities and Exchange Commission has raised concerns about how the brokerage makes money, as traders do not pay a commission on trade and instead make money using payments for order flow.