Commission-free retail brokerage Robinhood posted a net loss of $423 million or $0.49 per share in the three months ended December. A year earlier, the company posted a net income of $7 million or $0.01 per share. Shares of Robinhood sank as much as 15% to $9.98 in extended trading following results. The share price at its IPO in July last year was $38, and its record high in August was $85.
Robinhood posted total revenue of $363 million for the fourth quarter ended Dec. 31, compared to $318 million a year earlier. Analysts on average had expected revenue of $362.14 million.
Transaction-based revenue from cryptocurrencies jumped 304% to $48 million in the fourth quarter, while revenue from equity trading declined 35% to $52 million. Robinhood has yet to turn a profit following its IPO. Although revenue was a positive sign, its monthly active users declined 8% from the previous quarter to 17.3 million as retail investors pulled back from the market.
Robinhood enjoyed a strong run during the pandemic, with homebound investors using its app to trade stocks and other assets. However, the platform became a victim of the Meme Stock Revolution. Robinhood has incurred the enmity of the WallStreetBets subreddit’s 11.6 million community for banning the trading of meme stocks at the height of the meme stock revolution. This may have been a strategic mistake.
For the first quarter of this year, Robinhood expects total net revenue will be less than $340 million, which would be down 35% from a year earlier when the meme stock rally boosted trading.