February 23, 2024

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Google-parent Alphabet offloads almost 90% stake in buying and selling app Robinhood

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That stake was value almost $419 million when Robinhood shares hit their peak of $85 in August 2021, only a month after the preliminary public providing.

Following the sale, Alphabet now owns 612,214 shares within the firm, value about $7 million, in keeping with Reuters calculations.

As of Thursday, Robinhood shares have dropped 86% from their report ranges.

Robinhood has been struggling to regain its footing after rising because the breakout monetary expertise app throughout the pandemic, when a number of retail merchants had been drawn to its platform due to its commission-free trades and easy-to-use interface.

The corporate’s platform additionally performed a serious position in fostering a meme inventory frenzy in January 2021, when a number of merchants banded collectively on social media to push up the worth of extremely shorted shares like GameStop.

However the Federal Reserve’s tightening cycle final 12 months hammered shares, particularly these of high-flying expertise corporations through which there was quite a lot of retail curiosity, denting Robinhood’s enterprise.

Earlier this week, Robinhood stated it had turned a revenue for the primary time as a public firm, shocking Wall Avenue, which was anticipating a small loss.

Nevertheless, as retail merchants stayed cautious, month-to-month energetic customers on the platform decreased to 10.8 million, 1 million fewer in comparison with the primary quarter and three.2 million lesser than final 12 months.

To counter weak spot in buying and selling, Robinhood has been seeking to develop income streams. In June, it agreed to purchase monetary expertise and bank card agency X1.

(Reporting by Niket Nishant in Bengaluru; Enhancing by Nivedita Bhattacharjee and Anil D’Silva)

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