Shares of US neobroker Robinhood (NASDAQ:HOOD) hit a multi-year high on Wednesday, topping $40 for the first time since late 2021.
Robinhood shares are up by more than 50% in the past month, and by more than 3x in 2024 year-to-date. HOOD also crossed an important psychological milestone on Wednesday, climbing above the company’s July 2021 $38 IPO price for the first time in more than three years. Robinhood shares soared to above $70 immediately following the company’s IPO, but dropped precipitously soon after as losses piled up and growth slowed, and were mired in a single-digit-value slump until late 2023, when crypto began its latest year-long climb.
While it is clearly soaring crypto prices and trading volumes buoying Robinhood’s stock price – highlighted by Bitcoin crossing the $100,000 mark for the first time today – investors also seem encouraged by Robinhood’s ability to produce real and growing revenues and profits (despite a disappointing set of Q3-2024 results at Robinhood), as well as its ability to truly grow the business via international expansion plans.
As far as the latter goes, Robinhood CEO Vlad Tenev revealed at an investor day in New York yesterday that the company plans to soon start serving clients in Asia out of regional headquarters in Singapore. Citigroup analyst Christopher Allen then wrote in a note to investors that Robinhood “has approval to expand its product offering in the UK… with plans to open an APAC office in Singapore and acquire brokerage licenses in the region.”
Robinhood has had mixed results so far with its expansion plans outside of its US home market. An early UK expansion attempt at around the time of its IPO was halted, but the company did eventually launch Robinhood UK earlier this year. Robinhood EU also recently got off the ground, focused on crypto trading.
However Asia presents a much bigger long term opportunity for Robinhood, especially given the company’s success overall with young investors and traders, and with the crypto trading crowd.
Tenev also indicated at the investor day that Robinhood plans to expand its offering of Event Contracts, similar to the US Presidential Election Event Contracts it rolled out ahead of the latest US election. The ability to “bet” on the outcome of a specific event was very successful at Robinhood, and the company will look to other similar opportunities to offer the product to its clients – perhaps even with sports betting.
Robinhood share price chart 2024 year-to-date. Source: Google Finance.
