Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a display throughout his firm’s IPO on the Nasdaq Market website in Instances Sq. in New York Metropolis, U.S., July 29, 2021.
Brendan McDermid | Reuters
Robinhood CEO Vlad Tenev mentioned Wednesday that the retail brokerage just isn’t trying to be acquired regardless of saying main layoffs after one other quarter of shrinking energetic customers.
“In a single phrase: No,” Tenev mentioned on an investor name when requested about doubtlessly being purchased by one other agency. “I feel we’re in a terrific place as a stand-alone firm. I really like us as a stand-alone firm.”
In Might, FTX CEO Sam Bankman-Fried revealed a stake in Robinhood, spurring hypothesis a couple of potential takeover bid from the crypto-focused brokerage. Bankman-Fried has since mentioned FTX just isn’t trying to purchase Robinhood outright.
Tenev did say that Robinhood was looking out for potential acquisitions of its personal. The corporate reported $6 billion in money on its stability sheet on the finish of the quarter.
“We really see alternatives, notably on this market setting, to leverage the stability sheet that we now have … to amass firms that speed up our roadmap,” Tenev mentioned.
The Robinhood investor name got here a day after the corporate introduced it was shedding 23% of its workforce. The corporate additionally reported a smaller-than-expected loss for the second quarter, however month-to-month energetic customers declined and income was down greater than 40% yr over yr.
Shares of Robinhood rose 11.7% on Wednesday following the layoff announcement. A number of Wall Avenue analysts mentioned the corporate’s cost-cutting efforts may very well be a lift to the inventory.
Robinhood reduce its full-year expense steerage by roughly $290 million, which incorporates about $70 million decline in anticipated share-based compensation. Tenev mentioned that the corporate plans to have constructive adjusted EBITDA — a measure of profitability that excludes sure prices akin to curiosity and taxes — by the tip of the yr.
The corporate pointed to price hikes from the Federal Reserve as a income development within the type of curiosity. CFO Jason Warnick estimated that each one-quarter of a proportion level price hike interprets into about $40 million of annualized income for Robinhood.
“The exact good thing about price hikes will rely on how balances and buyer charges range over time,” Warnick mentioned.
The CFO additionally mentioned Robinhood’s belongings beneath custody rose again above $70 billion in July after declining within the second quarter.
Regardless of Wednesday’s rally, Robinhood’s inventory continues to be down practically 42% for the yr and greater than 70% from the place its IPO was priced final yr.
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