Robinhood Markets Inc’s (NASDAQ: HOOD) revenue more than doubled in Q2 on a year over year basis. The company, however, cited low trading activity as it warned of a lower revenue this quarter – an announcement that saw the stock slip about 10% last night.
JJ Kinahan’s remarks on CNBC’s “Squawk Box”
Robinhood attributed much of its revenue gain to dogecoin and meme stocks, both of which are a fairly new phenomenon. Could it sustain it as a prominent source of revenue, is hard to predict, says JJ Kinahan, chief market strategist at TD Ameritrade. The guidance, however, doesn’t concern him much.
“They said this quarter may be a little bit slower, but in the brokerage business, this is indeed a slower quarter for everybody. Robinhood can tap into other stories like volatility to keep people interested in the market. It has a lot of options traders on its platform who love volatility. So, in case of a sell-off, they can get traders excited in a different way,” Kinahan said on CNBC’s “Squawk Box”.
According to Kinahan, volatility affects options across the board (calls and puts), so an opportunity to play the downside remains on the table even if events like tapering, inflation, and the delta variant weigh on the markets in the future.
Robinhood has no plans of a secondary offering
Following the release of the earnings report last night, Robinhood’s finance chief Jason Warnick confirmed that the financial services company has no plans of a secondary offering for additional fundraising. Warnick also said that calling Robinhood a meme stock doesn’t resonate with him.
“Robinhood has enough capital to withstand another shock like in January with the GameStop short squeeze,” the CFO added.
Robinhood debuted on the Nasdaq Stock Exchange last month at a per-share price of $38. After hitting a high of $70 a share, the stock is now trading at $46.
The post Here’s why Robinhood’s weak guidance isn’t worrisome for this analyst appeared first on Invezz.
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Wajeeh Khan
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