Robinhood Markets hasn’t even been public for a month, and it’s already one of the most volatile stocks around. This time, however, there is at least some rhyme or reason behind the move.
The shares fell more than 12% in premarket trading after the company’s first post-IPO earnings, which included a cautious outlook.
The GameStop frenzy carried Robinhood’s earnings in the early part of 2021 as meme stocks became all the rage. With that particular craze mellowing, and the stock market in general being pretty dead right now, equities trading has fallen and the company suspects that will continue.
But Robinhood had an ace in the pack this time—crypto trading. Cryptocurrency revenues surged to $233 million in the second quarter, from just $5 million the previous year. More new customers placed their first trade in crypto than equities for the first time in Robinhood’s history.
While the online brokerage’s diversification will placate some, it’s clear reliance on out-of-the-ordinary hysteria will concern many. On that point, Dogecoin accounted for an incredible 26% of the company’s quarterly revenue.
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