Robin Hood warns that retail transactions are slowing, especially in cryptocurrencies

In the picture in this photo, the Robinhood Markets logo is displayed on the screens of smartphones and PCs. (Photograph illustration by Rafael Henrique / SOPA Images / Light Rocket via Getty Images)

SOPA Images | LightRocket | Getty Images

Equity trading app Robin Hood (coming soon next week) warned about trading returns and potential slowdowns in new clients as the boom in personal investment begins to slow.

“Revenues for the three months to September 30, 2021 are lower than the three months to June 30, 2021, especially as a result of lower levels of trading activity compared to record highs for trading activity. For cryptocurrencies, the three months ending June 30, 2021 and the expected seasonality. ” Prospectus Released on Monday.

The deceleration is outside the booming level. A pioneer in free trading based in Menlo Park, Calif., Estimates revenues for the second quarter of 2021 from $ 546 million to $ 574 million. That’s a 129% surge from $ 244 million in the second quarter of 2020. Second-quarter results are expected to fall below the $ 522 million revenue generated in the first quarter in 2021.

However, the company estimated a net profit loss in the second quarter of 2021 from $ 537 million to $ 487 million, with a loss of $ 1.4 billion in the first quarter.

Offering stocks, cryptocurrencies, options trading, and cash management accounts, Robin Hood benefits from more speculative trading practices from its clients. Options trading accounts for about 38% of revenue, and crypto is 17% of revenue. In addition, margin and equity lending trading levels were raised in 2021.

Stagnation of options, margin and cryptocurrency trading (bitcoin price less than $ 30,000) could undermine Robin Hood’s growth towards one of the biggest public debuts of the year.

Robin Hood also said he expects new customer growth to be “low” in the third quarter of 2021 compared to the second quarter. June 30, 2021 and the seasonality of overall trading activity. “

Robin Hood expects the app to have 22.5 million funding accounts (accounts associated with bank accounts) as of the second quarter. This is an increase from a total of 18 million in the first quarter of 2021.

Robin Hood-its long-standing mission to “democratize” investment-has experienced a record level for new, young traders entering the stock market during a pandemic. The surge will continue until 2021 and is characterized by enthusiastic trading over so-called meme stocks.

The company hinted at clients who created accounts before and after the GameStop Short Squeeze in January, but probably stopped trading as the frenzy subsided.

“We experienced strong growth in new customers during the first six months of 2021,” Filing said. “In the long run, we don’t know if a cohort of these new customers will have the same characteristics as the previous cohort. These new customers will not increase their cumulative net deposits or transaction frequency on the platform the same. As long as new customers are added in the previous period, our ability to expand and expand our relationships with these customers will be affected. “

Robin Hood Seeking a $ 35 billion market valuation In future IPO. The stock trading app will try to sell the stock in the range of $ 38 to $ 42 per share.

— With a report from Kate Rooney on CNBC.

Robin Hood is 5 times CNBC Disruptor 50 Companies that have broken through this year’s list.

sign up Take a closer look at CNBC Disruptor 50’s companies and their founders, who continue to innovate in every sector of the economy, in our original weekly newsletter that goes beyond the list.

Robin Hood warns that retail transactions are slowing, especially in cryptocurrencies

Source link Robin Hood warns that retail transactions are slowing, especially in cryptocurrencies

Back to top button