Robinhood shares fall as crypto markets chill drives profit miss

Oct 28 : Robinhood's shares fell 8 per cent in premarket trading on Wednesday after a prolonged chill in crypto markets dragged the trading platform's third-quarter profit below Wall Street expectations.

Crypto markets have been under pressure this year due to shifting expectations for US interest rates, outflows from bitcoin exchange-traded funds and bouts of risk aversion that have unsettled investors and sparked waves of selling.

Here are more details:

• Robinhood's cryptocurrencies revenue fell 55 per cent in the third quarter to $120 million

• Rising oil prices and geopolitical tensions have added to market jitters, while heightened volatility has prompted retail traders to pull back from speculative bets

• Robinhood's per-share quarterly profit declined 16 per cent to 51 cents and missed Street expectations of 55 cents, according to estimates compiled by LSEG

• Bitcoin, the world's largest digital asset by market cap, has fallen nearly 28 per cent over the past 3 months

• Despite the quarter's volatility, Wall Street analysts remain optimistic about Robinhood's long-term growth prospects

• "We see Robinhood's legacy brokerage business continuing to perform well in what we see as a near-perfect environment for retail traders," J.P. Morgan's Kenneth Worthington wrote in a note

• The company, once heavily reliant on market-sensitive transaction revenue and retail trader sentiment, has rapidly expanded its product offerings in recent years, broadening its business into a full-service financial services firm

• Its total net revenue increased 12 per cent in the third quarter to $1.42 billion