Major Catalysts for the ROBINHOOD MARKETS Weekly
was just one of many companies that saw their shares hit hard in early trading
on Monday. Traders and investors are concerned about higher interest rates,
which now seem likely amid the highest inflation in years. The U.S. Federal
Reserve will begin a two-day meeting on Tuesday that could end with a signal
that rates will begin rising as soon as March.
Markets will release its fourth-quarter 2021 earnings on January 27.
it's an online trading platform, the majority of Robinhood's revenues come from
trade-related transactions. As a result, more monthly users equal more trading
activity on the platform, which implies more transaction revenues for
Robinhood. For Robinhood, transaction-based revenues are fees gained by routing
customer orders for stocks, options, or cryptocurrency to other brokers.
effective user growth remains the key to Robinhood's success.
website traffic increased in the most recent Q4 quarter, earnings from which
have yet to be published. To put things into perspective, total unique visits
to Robinhood increased by 18.7% year-over-year to 35.9 million. The increase in
visits reflects that Robinhood Markets may be able to deliver good
year-over-year top-line results in the Q4 quarter.
data for monthly visitors to Robinhood.com are not particularly encouraging for
the month of December. While the company's projected monthly visitation climbed
by 0.7% in November, it fell by 17.7% quarter-over-quarter to 10.5 million
users in December.
The drop in
unique visitors in December is expected to have reduced Robinhood's revenues in
the fourth quarter to some extent. Furthermore, Robinhood's key metrics, ARPU
(average revenue per user) and MAU (monthly active users), may have declined in
the fourth quarter due to the dip in its monthly user base.
It’s not all
about the figures in the sales. But the reaction can come from what management
says about the future. What Wall Street wants to hear is that they are coming
into their own. Management also needs to lay out the path forward into a better
prosperity. Nobody wants to invest in a stock that has dwindling growth trends,
especially a young company like this.
Markets lock-up period is set to end on Tuesday, January 25th. Robinhood
Markets had issued 55,000,000 shares in its public offering on July 29th. The
total size of the offering was $2,090,000,000 based on an initial share price
of $38.00. After the expiration of Robinhood Markets’ lock-up period,
restrictions preventing company insiders and major shareholders from selling
shares in the company will be lifted.
Jones Industrial Average at one point fell more than 860 points in Monday's
session, as traders fretted about the outcome of the Fed meeting on Wednesday.
Worries on earnings out of Tesla and Apple this week — and the precarious
situation between Russia and Ukraine — is also hurting sentiment for stocks.
500 slipped into correction early on in the session, defined as a 10% decline
from a recent high.
"It certainly is a plethora of pain for investors
this morning. I would be very hesitant of getting in or adding positions in
just about anything before we hear from an increasingly hawkish Federal Reserve
on Wednesday," said The
Strategic Funds managing director Marc LoPresti on Yahoo Finance Live.
stands, the Nasdaq is down 15% so far in 2022, followed by an 11% drop for the
S&P 500 and a 8.1% decline for the Dow.
sell-offs in tech stocks are mostly tied to inflation, which is at a 40-year
high. To prevent a dizzying rise in prices from doing damage to the economy,
the Federal Reserve has hinted that it would start raising interest rates this
year, and analysts expect the institution to do it at least three times this
year, starting in March.
scenario makes less risky assets, such as Treasury bonds, savings accounts -
just as attractive as tech stocks, whose economic model is future growth.
of better and higher returns on investment from assets judged to be low-risk
makes investors less inclined to buy technology stocks that sell promises.
Out of the pandemic, we saw a new breed of traders using the Robinhood Markets platform. Those profits have vanished in the
last few months as the Russell 2000 crashed from its highs. With it Robinhood’s
stock came down hard. Now it cannot find its footing.
Robinhood Markets won’t share data on actual performance of its
customers, but Noah Weidner, writer of the Business As Usual newsletter and now
a member of the editorial team at Stocktwit, shows calculations that
crowd-following behavior helped them and then hurt them.
The latter outcome was baked into their behavior as influenced by the
investing app, according to an academic paper by Brad Barber, Terrance Odean,
Xing Huang and Chris Schwarz. They note that inexperienced investors are more
likely to be influenced by what they see others doing and that Robinhood’s “Top
Movers” are traded disproportionately. And, because trading is so frictionless
on the app, they tend not to rely on critical thinking as much as more seasoned
investors. They also trade frequently—about 40 times as much per dollar in
their accounts compared with a customer of Charles Schwab based on data from