Update: When we wrote this, Robinhood’s inventory was off double-digit proportion factors in pre-market buying and selling, and opened below $10 per share. So, it was present as of then. Since that second, nonetheless, Robinhood shares have flipped round and rallied. Read on for the bearish setup the market was flashing at first of the day, however remember that Robinhood reversed its declines no less than by noon buying and selling!
The 2020-2021 trading and investing boom lifted numerous corporations’ income development, fundraising and narrative energy. Some of the best-known even went public on the again of a worldwide pattern that made their companies shine. Now that shine is fading, and the worth of choose fintech considerations is in free-fall.
The greatest instance of this reversion is Robinhood, an organization that turned synonymous with consumer trading and investing activity, and the meme inventory craze specifically. That Robinhood added crypto buying and selling in recent times, including to its torrid ascent, merely makes its latest outcomes all of the extra pertinent to the methods public and private markets have modified in late 2021 and to date in 2022.
Robinhood’s inventory fell sharply yesterday and dropped additional after the corporate reported its Q4 2021 results. As of this morning, Robinhood inventory was value round $10.85 per share, 71.5% off its IPO value and 87.2% off its all-time highs. What occurred? Let’s discover out.
What makes Robinhood useful
The easiest technique to think about Robinhood’s enterprise is to multiply energetic customers by common income per person. Users — month-to-month energetic customers, or MAUs — assist the corporate generate cost for order stream and different incomes. Average income per person — or ARPU, in case you are into really terrible acronyms — is simply that, permitting us to think about the corporate’s normal well being as MAU*ARPU = outcomes.
More of both is good, much less of both is unhealthy. More of each in any quarter is nice, much less of each in any quarter is in all probability a catastrophe. Got it? OK, let’s discuss numbers.