TLDR
- Robinhood Markets stock jumped 413% in 12 months as equities and crypto trading volume more than doubled year-over-year
- Cathie Wood’s Ark Invest purchased $21.3 million worth of HOOD shares through two ETFs this week
- The company now manages $304 billion in platform assets across 26.7 million funded accounts
- Analysts expect Q3 earnings of 51-52 cents per share when Robinhood reports on November 5
- Recent acquisitions include Bitstamp for $200 million and WonderFi for $180 million to expand crypto operations
Cathie Wood’s Ark Invest made a $21.3 million bet on Robinhood Markets this week. The firm purchased 167,489 shares through its ARK Innovation and ARK Next Generation Internet ETFs.
The timing looks deliberate. Robinhood reports third-quarter earnings after market close on November 5.
The stock has climbed 413% over the past year. Trading activity across the platform tells the growth story.
Equities trading volume jumped 107% year-over-year to $199.2 billion in August. Cryptocurrency trading exploded 154% to $13.7 billion.
Options contracts rose 33% to $196 million. Total platform assets increased 112% to $303.9 billion.
Strong Momentum Heading Into Earnings
Robinhood now manages 26.7 million funded accounts. Average account values crossed $10,000 for the first time in company history during Q2.
Second-quarter revenue hit $989 million, up 45% from the previous year. Net income doubled to $386 million.
Average revenue per user climbed 34% to $151. The company has beaten analyst estimates in each of the last three quarters.
Analysts project Q3 earnings of 51-52 cents per share. Revenue estimates sit at $1.19 billion for the quarter.
Options data from Nasdaq shows roughly 60% bullish sentiment on the stock. Institutional investors appear confident ahead of the report.
New Products and International Expansion
Robinhood launched asset tokenization in June for European Union customers. The program converts traditional assets into tradeable digital tokens on the blockchain.
Prediction markets went live in March. Users can bet on outcomes in sports and financial events.
The platform charges $0.01 per contract. Nearly 100 million contracts traded in Q2, generating roughly $1 million in revenue.
Total trading volume on prediction markets approached $1 billion. The company partnered with Kalshi in August to offer bets on football games.
Crypto Acquisitions Drive Growth Strategy
Robinhood acquired Bitstamp for $200 million in an all-cash deal finalized in June. The purchase provides access to over 50 crypto licenses across Europe, the UK, and Asia.
Johann Kerbrat, General Manager of Robinhood Crypto, explained the value. “They have products that we don’t have, like order books, crypto as a service, advanced API, and lending and staking.”
The company bought Toronto-based WonderFi for $180 million in May. This acquisition establishes a position in the Canadian digital asset market.
Robinhood also plans to develop its own Layer 2 blockchain on the Arbitrum network. The project aims to improve transaction efficiency and scalability.
Ark Invest has been building positions in companies at the intersection of crypto and traditional finance. The firm now holds 1,165,397 shares of crypto exchange Bullish, valued at $73.85 million.
Robinhood closed at $127.22 on Wednesday, up 3.5% for the day. Pre-market trading Thursday showed the stock at $128.40, a 0.93% gain.
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