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Robinhood Shares Drop 20% After FTX Turmoil

Started by forex4you, Nov 10, 2022, 05:52 am

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Robinhood Shares Drop 20% After FTX Turmoil

<p class="MsoNormal">The share price of NASDAQ-listed zero-free trading app Robinhood (<a href="">ticker:HOOD</a>) fell 19% on Tuesday after information that Binance, one of the leading cryptocurrency exchanges, agreed to acquire FTX, a crypto platform owned by, a soon-to-be former billionaire, Sam Bankman-Fried.</p><p class="MsoNormal">The sharp price drop occurs amid concerns that the cryptocurrency mogul, who <a href="">bought</a> a 7.6% stake in Robinhood in May 2022, will have to sell at least some of it to solve his company's current crisis. This week, the <a href="" target="_blank" id="47c3bef3-27ee-4953-8504-159e1b829b33_1" class="terms__main-term">liquidity</a> of the <a href="">FTX exchange</a> collapsed as investors rushed to withdraw their funds following worrying news about the financial balance sheet of Alameda Research, the other cryptocurrency firm owned by Bankman-Fried.</p><p class="MsoNormal">The FTX CEO currently holds 56,273,469 shares in HOOD. Tuesday's steep decline brought the price from $11.72 to $9.74, which is the lowest price it has been in more than two weeks. For the company, it was the steepest one-day decline since August 2021. The whole of 2022 has definitely not been a successful year for Robinhood as year-to-date (YTD) shares have lost 45%.</p><p class="MsoNormal">Robinhood debuted on the stock market in July 2021, selling for $38 per share and raising $2 billion from investors. The company rose for only a short while, reaching a record price of $85 a few days after the initial public offering (IPO), and has been in a clear downward trend ever since.</p><p class="MsoNormal">Losses and Workforce Cuts</p><p class="MsoNormal">The major US commission-free stock trading and investing app <a href="">reported</a> a quarterly net loss of $175 million last week. While the total net revenue increased by 14% to $361 million compared to the previous quarter, revenue in the cryptocurrency segment fell by 12% to $51 million.</p><p class="MsoNormal">Robinhood states, that the volatile market environment and risk aversion are the main reason for the continued slump and the lowering number of monthly active users (MAU). During the last quarter, the company's user base fell to 12.1 million from the previously reported 14 million.</p><p class="MsoNormal">Current industry turmoil has caused two rounds of layoffs; first, in <a href="">April 2022</a>, when Robinhood laid off 9% of its workforce and second, in <a href="">August 2022</a>, when an additional 23% of the staff was left unemployed.</p>

This article was written by Damian Chmiel at

Source: Robinhood Shares Drop 20% After FTX Turmoil
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