When companies release their quarterly results, investors can respond in various ways. For Robinhood, the disappointing Q4 2021 results seemingly didn’t go over well with the populace. As a result, company shares nosedived by as much as 16%.
Robinhood Shares Hit A Snag
The shares of a publicly-traded company reflect how well the firm performs. If quarterly earnings don’t meet investor expectations, some market volatility will be. Robinhood was forced to post a net loss of $423 million in Q4 2021, rather substantial. The COVID-19 situation continues to wreak havoc globally, but wealth and investment management applications often ten to do well during these uncertain times.
The bigger concern is how monthly active users (MAU) are down by eight percent, which is worrisome. Fewer users and a net loss are bad enough, but the average revenue per Robinhood user is also on a downward slope. With no positive metrics to report to appease investors and speculators, the share price decrease to below $10 was unavoidable.
One must also look at the much bigger picture here. Robinhood went public in the second half of 2021. This process yielded tremendous excitement, allowing Robinhood to price its shares at $38. They even spiked to $85 in August of 2021, although everyone knew that was both enormously overvalued and unsustainable in the long term. Today. Robinhood stock trades at $12.7 again, but it shows that things are not looking great for the company.
Returning to the initial listing price will be challenging enough for Robinhood, let alone getting close to the all-time high again. While the company provides exposure to many investment options – including select cryptocurrencies – it seems users have become less eager to check out the service or spend money on it. Bloomberg deems Robinhood the worst high-profile global stock market debut since the COVID-19 pandemic began. Not a title anyone wants to old, especially this early into 2022.