The tech giant was an early investor in Robinhood but began selling shares as trading volume dried up.
Google parent Alphabet Inc. has divested 100% of its stake in Robinhood Markets, according to a 13F-HR filing on Nov. 9.
As of September 30, 2023, the company reported 0 Class A shares of Robinhood (US:HOOD), down from 612,214 shares in the August 4 filing.
Robinhood, known for its commission-free trading and user-friendly interface, had previously attracted a large early investment from Alphabet. However, Alphabet’s decision to sever ties with Robinhood was the result of a gradual reduction in its stake, which had already been slashed to nearly 90% a few months ago.
According to Reuters, Robinhood's market appeal began to decline due to unfavorable economic conditions caused by the Federal Reserve's interest rate hike last year. Coupled with the slowdown in trading, the app's revenue in the third quarter earnings report failed to meet Wall Street expectations. As a result, Robinhood's customer base appeared less active.
Charge in advance
Despite the volatile revenue, Robinhood is moving forward with its strategic growth plans. Recently, the company unveiled plans to introduce cryptocurrency trading in the European Union after regulatory approval. The launch of cryptocurrency in the EU is part of the company's broader growth strategy and will follow the upcoming launch of brokerage services in the UK.
However, all these ambitious expansion plans come with challenges. The trading app’s cryptocurrency trading revenue fell 55% year-over-year to $23 million in the third quarter of 2023. Despite this, Robinhood remains steadfast in its commitment to offering crypto products internationally to expand its customer base.
Furthermore, the scale of Robinhood’s involvement in the cryptocurrency market is massive. According to an August 30 report from Arkham Intelligence, Robinhood holds the fifth-largest account on the Ethereum blockchain and the third-largest Bitcoin address, the latter of which holds more than $4.3 billion in Bitcoin.
The company also successfully reacquired its own shares purchased by Sam Bankman-Fried. On September 1, 2023, Robinhood reached an agreement with the U.S. Marshals Service to repurchase shares seized from Bankman-Fried's Emergent Fidelity Technologies for $605.7 million. The deal came after the U.S. government took over Bankman-Fried's Robinhood shares when FTX and Emergent filed for bankruptcy protection last year. #Robinhood #Alphabet
