Robinhood, the popular trading app known for its commission-free trades, is expecting to see its highest quarterly revenue since the meme stock frenzy earlier this year. According to a report by Reuters, the company is anticipating strong financial results for the third quarter of 2021, driven by increased trading activity and new user sign-ups.
The meme stock frenzy, which began in January with stocks like GameStop and AMC Entertainment seeing unprecedented levels of volatility and trading volume, brought a surge of new users to Robinhood as retail investors flocked to the platform to participate in the market frenzy. This influx of new users helped drive record revenue for the company in the first quarter of 2021.
Since then, Robinhood has continued to see strong growth in its user base and trading activity. The company reported 22.5 million funded accounts as of the end of June, up from 18 million at the end of March. This growth has been fueled by a combination of factors, including increased interest in investing among younger generations, the rise of meme stocks and cryptocurrencies, and the continued popularity of commission-free trading.
In addition to its core trading business, Robinhood has also been expanding into other areas of financial services, such as cryptocurrency trading and cash management. The company recently launched a new feature called “Recurring Investments,” which allows users to automatically invest in stocks or ETFs on a regular basis.
Despite its success, Robinhood has faced criticism and regulatory scrutiny in recent months, particularly in relation to its handling of the meme stock frenzy and its business model of selling order flow to market makers. The company has also faced backlash from some users over outages and technical issues that have disrupted trading on the platform.
Looking ahead, Robinhood will be closely watched by investors and analysts as it prepares to release its third-quarter earnings report. The company’s performance will provide valuable insights into the health of the retail trading industry and the ongoing impact of the meme stock frenzy on the financial markets.