Robinhood CEO Vlad Tenev is implementing various strategies to revitalize the company’s stock price, which has lagged behind the S&P 500 in the past year. Despite facing criticism for gamifying investing and concerns over profitability, Robinhood has rolled out several new features and expansion plans in recent months.
- UK Launch: Robinhood will launch its platform in the UK in early 2024, offering 6,000 US stocks and 24-hour trading five days a week. This marks the company’s third attempt at entering the UK market, this time with a license from the FCA.
- 24-Hour Trading: Robinhood launched 24-hour trading for select stocks and ETFs in the US earlier this year, allowing trading from 8:00 p.m. ET Sunday to 8:00 p.m. ET Friday. The number of eligible stocks has since surpassed 100.
- Product Expansion: Robinhood has expanded its product offerings to include gold and retirement accounts in the past six months. They are also eyeing the launch of futures trading in 2024 and a credit card offering through the acquisition of startup X1.
- Revenue Growth Potential: CEO Tenev believes the platform has the potential to reach “nine figures” in annual revenue, but analysts remain cautious about the long-term sustainability of Robinhood’s growth model.
Challenges and Analyst Sentiment:
While Robinhood has implemented numerous initiatives to drive growth, its stock price has not yet reflected these efforts. Wall Street analysts remain skeptical about the company’s ability to maintain profitability and generate competitive margins in the long run, particularly due to their focus on small accounts with limited profitability potential.
Robinhood’s stock price remains significantly below its 2021 IPO price despite the company’s recent product launches and expansion plans. While the company’s future remains uncertain, their efforts to innovate and expand their offerings are worth watching in the coming year.