Robinhood is tanking 📉 (might become a takeover target soon? 🤔); Estonia’s🇪🇪 6th unicorn and its plans for the metaverse🦄 ; Convicted scammer is leading a popular DeFi protocol?! 🤯🤯🤯
Good Morning FinTech, January 31
Good morning Everyone,
And happy Monday! I trust you had some time to relax over the weekend. To make the most of the new week, I invite you to explore 3 super hot FinTech stories for today:
Robinhood is tanking 📉 (might become a takeover target soon? 🤔)
Freefall 👀 Robinhood’s stock fell 12% trading after the brokerage app reported a loss of $423M for the fourth quarter. The loss was significantly larger than what analysts were expecting…
More on this 👉 The company had seen a boost in tech and administrative expenses that caused its results to lag. The brokerage recorded revenue of $363M for the October through December period. It was a 14% increase.
Furthermore, Robinhood saw an 89% jump in revenue for the year, up to $1.82B – an increase from $959M the previous year — and the net loss for the year was $3.7B.
One can remember that the brokerage last year had experienced momentum in its options and crypto trading business. Investors then had been dabbling in riskier and more speculative trading strategies.
In the fourth quarter, the company had seen revenue tied to stock trading fall 35%, hitting $52M, down from $80M. And that caused the investors to worry.
The GME saga & its impact 🥊 The $HOOD was put in a very bright spotlight last year when the GameStop saga took Wall Street by storm. It eventually led to the fact that Robinhood was forced to limit trading in order to meet clearinghouse deposit requirements set by regulators. While the trading pause was temporary, its effects still linger.
Robinhood was hit with lawsuits alleging the restrictions caused financial harm to individual traders and paid out its first arbitration award earlier this month.
It also suffered significant reputational damage. Before January 28, 2021, it was seen as the champion of the individual trader—after, it was considered the bedfellow of Wall Street.
So despite all the frenzy and hate, does Robinhood still have a future? Here’s the takeaway👇🏼