After the commission-free brokerage reported a quarterly loss on Thursday evening, shares of Robinhood Markets Inc (HOOD.O) plummeted more than 14% and were expected to open Friday’s session at their lowest level since the stock’s IPO in July.
The corporation reported a $423 million net loss for the three months ending December, compared to a profit a year ago, and its costs more than doubled.
Following its IPO, Robinhood, like many other Internet start-ups, has struggled to make a profit. The number of monthly active users fell 8% from the previous quarter as retail investors withdrew from the market.
“Robinhood was one of the pandemic darlings. Almost exactly a year ago, it sat at the center of the meme stock mania. And that has clearly cooled off as we headed into a new year,” Art Hogan, chief market strategist at National Securities in New York, said.
“Its popularity seems to be on the decline. And its revenue growth is following in the wake of its declining popularity. So when you sum all that together, it likely has a choppy road in front of it.”
Before the bell on Friday, the stock was trading at $9.93. Its IPO price was $38 in July of last year, and its all-time high was $85 in August.
According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, short interest in Robinhood was $501 million, or 10.77 percent of the float, with around $127 million worth of shares shorted in the last 30 days alone.
On the retail trading community Stocktwits and popular debates on Reddit, the stock was also among the most active and watched.
