Robinhood faces lingering issues a year after Meme-Stock Mania
But the day after GameStop peaked, Robinhood abruptly restricted trading in some meme stocks, saying it was forced to do so by a liquidity crunch, Wall Street rules and chamber limits. compensation. The restrictions sent shares plunging, prompting lawsuits, congressional hearings and a Securities and Exchange Commission investigation.
“A new generation has turned the act of investing into a mass movement,” Robinhood said in a statement Tuesday about market events last year. “We never want our customers to be surprised by trade restrictions again,” he added, noting that he had notably strengthened his risk and compliance infrastructure. On Wednesday, SEC Chairman Gary Gensler released a brief statement saying the agency was still working on recommendations to make the market “as fair, orderly and efficient as possible.”
Robinhood said Thursday it lost $3.69 billion last year, including $423 million in the last three months of 2021. Revenue for the quarter rose 14% to $363 million, compared to the same period in 2020. That year, it made a profit of $13 million, including $7 million in the last quarter of this year.
“We had a momentous year, nearly doubling the number of customers on the platform and making critical investments in our team and infrastructure to support growth,” Vlad Tenev, co-founder and chief executive, said in a statement. press release accompanying the financial statements. “This year, we will expand our product ecosystem.”
Analysts had expected the company to say it lost more than $300 million in the fourth quarter.
Robinhood’s stock fell 15% in the secondary market on Thursday and has lost around two-thirds of its value since its IPO this summer, fueling rumors that it could become a takeover target. Ongoing problems from the stock market rally meme – and related trade restrictions – have clouded the outlook, but the company received some good legal news on Thursday before reporting on its financials.