Robinhood stock took a dip after the company warned investors of a short-lived revenue surge due to the crypto boom.
Robinhood recently made the big step of becoming a publicly-traded company. The company barreled into the arena with 55 million shares debuting at $38.
According to its first earnings report as the publicly traded Robinhood Markets Inc., revenue reached $565 million. A significant portion of that increase was brought on by digital currencies such as Dogecoin. In the second quarter, crypto revenue remained high.$233 million earned brought the total up 4,560% from the previous year.
The revenue from digital currency surpassed that gained from traditional stock and trading options combined, with Dogecoin making up 62%.
Despite these promising figures brought on by cryptocurrencies, the brokerage firm warned investors on its second-quarter earnings call: “We expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts” in the following quarter, Robinhood commented in a statement.
Following the call and the warning for Q3, Robinhood shares dipped to $45.70 during extended trading. This comes after the company’s share value skyrocketed 123% just after its IPO.
Robinhood continues crypto expansion
The company also fielded questions from investors and market analysts during the earnings call. On everyone’s mind was the question of crypto wallets. Late last month, as the IPO loomed, the company said that crypto wallets were in Robinhood’s future.
According to CEO Vlad Tenev, this is something that’s still in the works;
“It’s something that our teams are working on. The ability to deposit and withdraw cryptocurrencies is tricky to do with scale, and we want to make sure it’s done correctly and properly,” said Tenev. The CEO mentioned the wallet demand among Dogecoin enthusiasts was high in particular.
Other additions included potential in-app social media features, the ability to gift stocks, retirement accounts, and the expansion of crypto offerings available for trading.
In just one year funded accounts on the Robinhood app went from 9.8 million to 22.5 million as of late June, according to their statement.
As the crypto market continues to surge, big-name marketplace entities like Robinhood will likely need to adapt to the digital currency space to cater to the growing number of individuals investing in these assets.
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