Google-parent Alphabet offloads nearly 90% stake in trading app Robinhood
Reuters
Published Aug 05, 2023 01:13
By Niket Nishant
(Reuters) -Google-parent Alphabet (NASDAQ:GOOGL) said on Friday it had slashed its stake in Robinhood (NASDAQ:HOOD) Markets by nearly 90%, cutting its exposure to the trading app operator that has been grappling with a slowdown in its mainstay business.
Alphabet had reportedly invested in Robinhood when the latter was an unlisted startup, and it held over 4.9 million shares in the company as of the end of 2021.
That stake was worth nearly $419 million when Robinhood shares hit their peak of $85 in August 2021, just a month after the initial public offering.
Following the sale, Alphabet now owns 612,214 shares in the company, worth about $7 million, according to Reuters calculations.
As of Thursday, Robinhood shares have dropped 86% from their record levels.
Robinhood has been struggling to regain its footing after emerging as the breakout financial technology app during the pandemic, when several retail traders were drawn to its platform because of its commission-free trades and easy-to-use interface.
The company's platform also played a major role in fostering a meme stock frenzy in January 2021, when several traders banded together on social media to push up the value of highly shorted stocks like GameStop (NYSE:GME).
But the Federal Reserve's tightening cycle last year hammered shares, especially those of high-flying technology companies in which there was a lot of retail interest, denting Robinhood's business.
Earlier this week, Robinhood said it had turned a profit for the first time as a public company, surprising Wall Street, which was expecting a small loss.
However, as retail traders stayed cautious, monthly active users on the platform decreased to 10.8 million, 1 million fewer compared to the first quarter and 3.2 million lesser than last year.
To counter weakness in trading, Robinhood has been looking to expand revenue streams. In June, it agreed to buy financial technology and credit card firm X1.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.