Vlad Tenev, CEO and co-founder of Robinhood Markets, Inc., is proven on a display screen throughout his firm’s IPO on the Nasdaq Market website in Occasions Sq. in New York, United States, July 29 2021.
Brendan McDermid | Reuters
Robinhood CEO Vlad Tenev stated on Wednesday the retail brokerage was not in search of acquisition regardless of information of main layoffs after one other quarter of energetic customers declined.
“In a nutshell: no,” Tenev stated on an investor name when requested if he was doubtlessly being purchased by one other firm. “I believe we’re in a terrific place as a standalone enterprise. I like us as a standalone enterprise.”
In Might, FTX CEO Sam Bankman-Fried disclosed a stake in Robinhood, sparking hypothesis of a potential takeover bid by the crypto-focused brokerage. Bankman-Fried has since stated that FTX isn’t seeking to purchase Robinhood outright.
Tenev stated Robinhood is in search of potential acquisitions. The corporate reported $6 billion in money on its steadiness sheet on the finish of the quarter.
“We truly see alternatives, particularly on this market atmosphere, to leverage the steadiness sheet now we have … to accumulate companies that speed up our observe document,” Tenev stated.
Robinhood’s investor name got here a day after the corporate introduced it was shedding 23% of its workforce. The corporate additionally reported a lower-than-expected loss for the second quarter, however month-to-month energetic customers have been down and income was down greater than 40% year-over-year.
Robinhood shares rose 11.7% on Wednesday after the layoff announcement. A number of Wall Road analysts stated the corporate’s cost-cutting efforts may enhance the inventory.
Robinhood reduce its full-year spending forecast by about $290 million, which features a drop of about $70 million in deliberate inventory compensation. Tenev stated the corporate expects to have optimistic adjusted EBITDA — a measure of profitability that excludes sure prices corresponding to curiosity and taxes — by the tip of the 12 months.
The corporate stated Federal Reserve fee hikes have been a supply of curiosity earnings progress. Chief Monetary Officer Jason Warnick estimated that each quarter-percentage-point fee hike interprets to about $40 million in annualized income for Robinhood.
“The exact advantage of fee hikes will rely upon how buyer balances and charges change over time,” Warnick stated.
The CFO additionally stated Robinhood’s belongings in custody rebounded above $70 billion in July after falling within the second quarter.
Regardless of Wednesday’s rally, Robinhood’s inventory remains to be down practically 42% for the 12 months and greater than 70% from its IPO value final 12 months.
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